Tiffany's Earnings Beat Estimates, Despite Sluggish U.S. Sales
Tiffany said on Friday that the pace of its worldwide sales growth would pick up again this year, with Asia leading the increases, and its shares rose 4 percent.
The forecast of 6 percent to 8 percent sales growth suggests a return to the more robust gains Wall Street has come to expect from the high-end jeweler after a year when sales suffered from weak demand for its inexpensive silver jewelry and slower growth in China.
The New York company, which has been expanding aggressively in markets such as China, had lowered its own projections several times in the last year, raising fears that its torrid growth of recent years was ending.
Tiffany & Co. (TIF), famed for its blue boxes and expensive necklaces, said it expected sales in Asia, excluding Japan, to rise at a mid-teens percentage rate this year, compared with 8 percent last year.
Fashion brands Burberry Group and Hugo Boss AG, handbag maker Coach Inc. (COH) and Swiss watchmaker Swatch Group SA have also been upbeat about China in recent weeks.
Tiffany's sales forecast implies a sales range this year of $4.02 billion to $4.1 billion, largely above the $4.03 billion Wall Street analysts were projecting, according to Thomson Reuters I/B/E/S.
Global sales rose 4.1 percent to $1.24 billion in the fourth quarter ended Jan. 31, while sales at stores open at least a year were unchanged. The results were consistent with the November-December sales that Tiffany reported right after the holiday season.
Still, Tiffany reported a 3 percent decline in sales at its Fifth Avenue flagship in Manhattan, compared with a 2 percent drop in the first two months of the quarter, suggesting worsening trends in January.
During the quarter, earnings rose to $179.6 million, or $1.40 a share, from $178.4 million, or $1.39 a share, a year earlier.
The results beat analyst estimates by 5 cents a share.
The company said it expected a profit of $3.43 to $3.53 a share this fiscal year.