Tiffany Q2 Results Miss Estimates, Trims 2015 EPS Outlook

(RTTNews) - Luxury jeweler Tiffany & Co. (TIF) reported Thursday that profit for the second quarter declined 16 percent from last year, reflecting higher expenses, unfavorable effects from the strong U.S. dollar and an impairment charge. However, worldwide sales increased amid improvements across most of the company's operating regions in constant currency.

Both adjusted earnings per share and quarterly net sales missed analysts' expectations. The company also trimmed earnings growth outlook for the full-year 2015.

"We entered this year expecting translation and tourism-related pressures on sales and earnings from the exceptionally strong U.S. dollar, as well as challenging economic conditions in certain markets. While the adverse effects from the strong dollar have been even more significant than initially expected, we met our overall expectations in the first half of the year," CEO Frederic Cumenal said in a statement.

The New York-based world's second-largest luxury-jewelry retailer reported net earnings of $104.9 million or $0.81 per share for the second quarter, lower than $124.1 million or $0.96 per share in the prior-year quarter.

Excluding a loan impairment charge of $0.05 per share, adjusted net earnings for the latest quarter was $111.2 million or $0.86 per share.

On average, 24 analysts polled by Thomson Reuters expected the company to report earnings of $0.91 per share for the quarter. Analysts' estimates typically exclude special items.

Worldwide net sales for the quarter edged down to $990.5 million from $992.9 million in the same quarter last quarter, and missed twenty Wall Street analysts' consensus estimate of $1.00 billion. Comparable store sales also decreased 1 percent.

On a constant-exchange-rate basis, both worldwide net sales and comparable store sales increased 7 percent, amid growth in Japan, Europe and Asia-Pacific, as well as increased sales of fashion gold jewelry and statement jewelry.

Sales rose 4 percent or 10 percent in constant currency in the Asia-Pacific region, 2 percent or 19 percent in constant currency in the European region, and 5 percent or 27 in constant currency, in Japan. Meanwhile, sales declined 2 percent in the Americas region.

Looking ahead to fiscal 2015, Tiffany now projects adjusted earnings to be 2 to 5 percent below last year's $4.20 per share, down from the prior forecast for a minimal growth. The forecast assumes no growth in net earnings in the third quarter, and a resumption of growth in the fourth quarter.

The Street is currently looking for full-year 2015 earnings of $4.26 per share, on annual revenue growth of 2.1 percent to $4.34 billion.

"In light of the difficult environment exacerbated by the strong dollar and ongoing external uncertainties, we are tempering our full year earnings forecast. However, we remain focused on pursuing longer-term growth opportunities that strengthen Tiffany's position among the world's important luxury brands," Cumenal added.

In Thursday's regular trading session, TIF is currently trading at $84.80, down $0.28 or 0.33% on a volume of 1.65 million shares.