Tiffany Q1 Profit Surges, Ups Full Year EPS View

(RTTNews) - Luxury jeweler Tiffany & Co. (TIF) Wednesday reported increased profit for the fourth quarter, as sales climbed 13 percent, with Japan witnessing strong customer demand in March. The company lifted its full-year earnings forecast. The stock added close to 6 percent in pre-market trading.

Net earnings increased to $125.61 million from $83.58 million and earnings per share advanced to $0.97 from $0.65. Last year, the firm recorded $0.05 per share in expenses for staff and occupancy reductions.

On average, 24 analysts polled by Thomson Reuters expected earnings per share of $0.78 for the quarter. Analysts' estimates typically exclude one-time items. Net sales climbed 13 percent to $1.012 billion from $895.48 million. Analysts estimated revenues of $955.05 million.

On a constant-exchange-rate basis, worldwide net sales increased 15 percent and comparable store sales rose 11 percent due to growth in most regions.

Michael Kowalski, chief executive officer, said, "This is an excellent and encouraging start to the year. We were pleased with the strong and broad-based sales growth across most regions and product categories and our ability to leverage those improved sales into very significant growth in operating and net earnings.''

Kowalski added that strength continued in fine and statement jewelry sales, while sales of new or expanded jewelry collections accelerated, led by the ATLAS collection.

Total sales increased 8 percent to $439 million in the Americas, while it climbed 17 percent in the Asia-Pacific to $261 million. Sales in Europe were 9 percent higher at $101 million.

In Japan, total sales climbed 20 percent to $174 million. On a constant-exchange-rate basis, total sales jumped 29 percent and comparable store sales increased 30 percent.

The firm noted exceptionally strong customer demand in March in Japan, which reflected the Japanese consumer's response to the increase in Japan's consumption tax which took effect on April 1.

After the tax increase became effective, the company experienced sales declines. However, the management is not changing its initial full-year expectation for a healthy rate of sales growth.

Tiffany opened four stores in the first quarter and closed one in the U.S. At April 30, the company operated 292 stores, compared to 275 stores a year ago.

For the fiscal year ending January 31, 2015, the management now expects net earnings in a range of $4.15-$4.25 per share, while the previous forecast was for earnings of $4.05-$4.15 per share. Analysts project annual earnings per share of $4.17.

This forecast assumes that worldwide net sales will increase by a high-single-digit percentage. All regions are expected to achieve growth in their total sales in U.S. dollars and in comparable store sales on a constant-exchange-rate basis.

TIF closed down 2.8 percent on Tuesday, but added 5.7 percent in pre-market trading.