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Tiffany Store Sales Drop Less Than Analysts’ Estimated

Monday, 27 August 2012 08:57 AM

Tiffany & Co., the world’s second-largest luxury jewelry retailer, jumped as much as 8.4 percent in early trading Monday after reporting a drop in worldwide comparable-store sales that was smaller than some analysts projected.

Tiffany rose 6 percent to $62 at 8:24 a.m. in New York and earlier climbed as high as $63.40. The shares retreated 12 percent this year through Friday.

Sales at stores open at least a year dropped 1 percent, excluding the effect of currency exchange-rate fluctuations, the New York-based company said in a statement Monday. David Schick, an analyst with Stifel Financial Corp., estimated a 3 percent decline. Comparable-store sales in Europe rose 2 percent, while Schick projected a 5 percent drop.

“There were some fears among investors that the worldwide comparable sales number could be a lot worse,” Schick, who’s based in Baltimore, said in a telephone interview. “The numbers have shown some resilience in the brand.”

Schick recommends holding the shares.

Tiffany’s comparable-store sales decline was “not as bad as feared,” Brian Nagel, an analyst at Oppenheimer & Co. in New York, wrote Monday in a note. He rates the shares outperform, the equivalent of a buy.

Sales have been hampered by slower tourist spending in the U.S. and fewer purchases in debt-strapped Europe. Global net sales will increase as much as 7 percent this year, down from a previous forecast of a maximum of 8 percent, Tiffany said.

Tiffany said profit excluding some items in the year ending Jan. 31 will be $3.55 to $3.70 a share, down from a May forecast of $3.70 to $3.80 a share. Analysts projected $3.64, the average of 24 estimates compiled by Bloomberg.

Profit Gains

Net income in the three months ended July 31 increased 2 percent to $91.8 million, or 72 cents a share, from $90 million, or 69 cents, a year earlier. Analysts projected 73 cents, the average of 21 estimates compiled by Bloomberg.

Revenue in the second quarter rose 1.6 percent to $886.6 million. The average of 19 analysts’ estimates was $890.1 million.

Sales at stores open at least a year retreated 5 percent in the Americas, including a 9 percent drop at the jeweler’s main store on Fifth Avenue.

Tiffany’s flagship store accounts for 8 percent of worldwide sales, and a little more than 40 percent of that comes from foreign tourists, Mark Aaron, a Tiffany spokesman, said at an investor conference in April.

Cie. Financiere Richemont SA is the world’s largest luxury jewelry maker.

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Monday, 27 August 2012 08:57 AM
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