Jewelry manufacturer Tiffany & Co. (TIF) is scheduled to report fourth-quarter results before the market opens Monday. The New York-based company is the world's second-largest luxury-jewelry retailer. Tiffany's jewelry products include gemstone, non-gemstone, gold, platinum as well as sterling silver. It also offers TIFFANY & CO. brand merchandise, including timepieces and clocks as well as sterling silver merchandise.
Like most companies that deal in discretionary products, Tiffany also has been hurt by the economic crisis that led to a decline in demand for its products. The company has witnessed a drop in sales in the past few quarters.
In late November 2009, Tiffany said its third-quarter net income was $43.34 million or $0.35 per share. Net earnings from continuing operations in the quarter were $43.3 million, or $0.34 per share. The results included a $4.0 million charge related to a diamond sourcing agreement and a $5.6 million tax benefit. Quarterly net sales slid to $598.2 million from $616.2 million reported in the same period last year.
At that time, the company forecast a mid-single-digit percentage increase in worldwide sales in the fourth quarter. The company noted that total sales growth in November ''is tracking favorably to management's expectation, but results in December are most relevant to the company's ability to achieve its outlook for the fourth quarter.''
On average, 18 analysts polled by Thomson Reuters expect the company to earn $1.13 per share for the fourth quarter with estimates ranging between $1.09 and $1.18 per share. Revenues for the quarter are estimated to be $970.93 million. Analysts' estimates typically exclude special items.
In the year-ago period, the company's net earnings totaled $31.1 million, or $0.25 per share and sales amounted to $841.22 million. The results included several charges related to retirement, employee reduction, impairment and closure charges.
However, demand for Tiffany's products is improving as the economy is beginning to move out of the crisis. In early January, Tiffany reported a 17% increase in worldwide sales for the two-month holiday period, as all the three of its geographic segments witnessed higher sales. The jewelry retailer reported net worldwide sales of $799.1 million in the period. On a constant-exchange-rate basis, worldwide net sales and comparable store sales increased 13% and 8%, respectively.
Further, Tiffany said it expects earnings and sales for the fiscal year ending January 31 to come in above its earlier forecast. On November 25, Tiffany had projected full-year earnings from continuing operations in the range of $1.88 - $1.98 per share and a worldwide sales decline of about 8%. Analysts look for full-year earnings of $2.07 per share on revenues of $2.70 billion.
In the previous year, the company reported earnings of $220.02 million, or $1.74 per share on revenues of $2.86 billion.
In January, Tiffany's board decided to increase its quarterly dividend by 18%. The company also decided to resume repurchasing its shares of common stock on the open market, which had been suspended since the third quarter of 2008.
Among peers, Signet Jewelers Ltd (SIG, SIG.L) is expected to report fourth-quarter results on March 25.
TIF closed Friday's regular trade at $47.25, down $0.33 or 0.69%, on 2.54 million shares. For the past year, the stock traded in the range of $19.97-$48.38.
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