By Phil Wahba
(Reuters) - Tiffany & Co's
Comparable-store sales, which exclude stores opened in the last year, rose 8 percent, a marked improvement over the holiday-season quarter, when results were flat, it said on Tuesday.
Tiffany executives, however, warned investors not to read too much into the good start to the year, pointing to lingering weakness in the Americas, a drop in the yen, which is hurting its profit, and ongoing poor results with less expensive jewelry, including silver.
Tiffany gets more than 30 percent of sales from jewelry costing less than $500, such as sterling silver heart pendants. In the first quarter, Tiffany sold fewer silver items.
In the Americas, sales advanced 6 percent, helped in part by much brisker business at its flagship Fifth Avenue store in Manhattan, where sales fell last year. The store generates about one-twelfth of companywide revenue.
In China, where Tiffany is opening four new stores this year and will have 26 by year end, sales growth contributed to a 14 percent gain for the Asia business.
In Japan, its second biggest market, sales were up 2 percent, and would have jumped 20 percent, if not for the impact of the yen's depreciation. Demand for expensive jewelry was a standout and the company credited government efforts to spur consumption.
Tiffany's quarterly results echoed recent reports by Saks Inc
For the quarter ended April 30, Tiffany reported that overall revenue rose 9.3 percent to $895.4 million, well above Wall Street expectations of $855.1 million, according to Thomson Reuters I/B/E/S.
Shares were up 4.1 percent to $79.34 in afternoon trading after earlier hitting their highest levels in nearly two years.
SOFTNESS PERSISTS AT LOW END
Last year, Tiffany set up a separate unit to cater to wealthy clients with special events, hoping to shore up sales in an increasingly competitive high-end jewelry market.
In April, it hosted an invitation-only event at Rockefeller Center, featuring celebrities and the world's largest Tiffany blue box over a skating rink, and said the party had generated good sales.
Tiffany has been faulted by Wall Street for offering uninspired silver jewelry. Chief Financial Officer Pat McGuiness said it is introducing new designs this year and next and stepping up marketing, but added there's still a way to go.
"We continue to anticipate that silver jewelry sales growth in 2013 will lag growth in higher price categories," McGuiness told investors.
The company kept to its earlier profit forecast, seeing annual profit at $3.43 to $3.53 per share.
Quarterly earnings rose to $83.6 million, or 65 cents per share, from $81.5 million, or 64 cents a share, a year earlier.
Excluding costs associated with a move to new offices last year, Tiffany earned 70 cents a share, while Wall Street expected 52 cents.
(Reporting by Phil Wahba in New York; Editing by Jeffrey Benkoe)
Source: http://news.yahoo.com/tiffany-first-quarter-sales-rise-more-better-expected-121248994.html
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