Luxury jewelry retailer Tiffany & Co. (TIF) reported Monday a higher profit for its fourth quarter, above market projections, boosted by strong comparable store sales across its geographies. Citing the tragic events in Japan, the company trimmed its first-quarter earnings forecast, which, however, is higher than last year's results and market estimates. The company also sees higher results in next full year.
Fourth-quarter net earnings were $181.22 million or $1.41 per share, up from $140.37 million or $1.10 per share last year. The latest quarter's earnings included $3.89 million or $0.03 per share of expenses related to the pending relocation of Tiffany's New York headquarters staff.
Excluding the item, net earnings were $185.11 million or $1.44 per share for the recent quarter.
On average, 16 analysts polled by Thomson Reuters expected earnings of $1.39 per share for the quarter. Analysts' estimates typically exclude one-time items.
Net sales increased 12 percent to $1.10 billion from $981.38 million a year ago, and were inline with fifteen Wall Street analysts' consensus estimates. On a constant-exchange-rate basis, worldwide net sales increased 11 percent.
Tiffany attributed the strong sales growth to improved performance in all geographic regions, with Americas, Asia-Pacific, Japan and Europe generating growth of 10 percent, 25 percent, 11 percent and 14 percent, respectively.
Worldwide comparable store sales, or sales from stores open for at least a year, increased 11 percent, compared to 10 percent rise last year, with strong growth in all regions. The company said its fourth-quarter sales were better than its holiday results.
Gross margin rose to 60.9 percent from 58.7 percent in the prior year, mainly on the recapture of higher product costs through retail price increases.
Chairman and Chief Executive Officer Michael Kowalski stated, "Our broad-based success reflected healthy comparable store sales growth and successful new store openings in the Americas, Asia-Pacific and Europe, and highly successful new product introductions including our extraordinary yellow diamond collection."
Looking ahead for the first quarter, Tiffany now expects earnings to be approximately $0.57 per share, lower than previous projection of $0.62 per share. In the prior year, the company's earnings were $0.48 per share. The $0.05 per share reduction in earnings forecast reflects a 15 percent anticipated decline in Japan sales due to the recent tragic events in that country. However, worldwide sales for the quarter are projected to rise 11 percent. Analysts project earnings of $0.55 per share for the quarter.
The company added that it has not adjusted sales or earnings plan for the remaining quarters of 2011.
For the year ending January 31, 2012, the company expects net earnings, excluding nonrecurring items, to increase by 14 percent to 18 percent to $3.35 - $3.45 per share on worldwide net sales growth of 12 percent to 14 percent. Analysts expect earnings of $3.26 per share for the year.
TIF is currently trading at $60.50 in pre-market activity, up $3.21 or 5.60 percent.
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