Tiffany Q4 Profits Quadruple on Global Sales Growth
Rising sales worldwide for jeweler Tiffany & Co., particularly during the holidays, boosted its fourth-quarter profit.
Tiffany, known for its signature turquoise boxes, on Monday also forecast 2010 earnings ahead of Wall Street’s expectations on Monday. But results missed analyst expectations and shares fell.
Tiffany’s quarterly profit more than quadrupled to $140.4 million, or $1.10 per share, from $31.1 million, or 25 cents per share last year. Excluding a restructuring charge, earnings in last year’s fourth quarter were 86 cents per share.
Revenue rose 17 percent to $981.4 million on growth in the Americas, Asia-Pacific and European regions.
Analysts polled by Thomson Reuters forecast profit of $1.13 per share on revenue of $970.9 million.
Luxury retailers, including Tiffany, suffered amid the pullback in consumer spending that accompanied the financial meltdown in late 2008. But as fears about jobs and the economy ease, sales have ticked up, particularly during the holidays, a key period for Tiffany.
The sales gain was broad-based, Tiffany said. In the Americas, sales rose 14 percent, driven by a “substantial” increase in the number of transactions, Mark Aaron, vice president of investor relations, said on a conference call Monday.
“U.S. store traffic in the quarter did improve from the steep declines experienced earlier in the year but only to a level that was virtually equal to last year, indicating that there was a meaningful improvement in the customer conversion rate,” Aaron said. He said there was growth in purchases at all prices, from silver jewelry under $500 to diamond jewelry over $50,000.
Sales in stores open at least one year, a key measure of a retailer’s fiscal health, rose 11 percent, helped by a 22 percent rise at its New York flagship store.
One hit was Tiffany’s collection of pendants and chains with key-shaped charms, ranging from sterling silver to gold and platinum with diamonds.
“From a merchandising perspective, it’s probably appropriate to call 2009 the year of the key,” Aaron said. Prices for the line, which launched last spring, range from $150 to $35,000.
For the year, profit rose 20 percent to $264.8 million, or $2.11 per share, from $220 million, $1.74 per share last year.
Revenue fell 5 percent to $2.71 billion from $2.85 billion a year ago.
In 2010, the company expects earnings from continuing operations of $2.45 to $2.50 per share. Analysts expect $2.43 per share.
Tiffany, based in New York, expects revenue to rise 11 percent, implying a total of $3 billion. Analysts expect $2.93 billion.
CEO Michael Kowalski said Tiffany has “begun the year with worldwide sales growth exceeding our first-quarter plan which calls for a high-teens percentage increase.”
Shares fell $2.15, or 4.5 percent, to $45.10 during morning trading. The stock has traded between $19.97 and $48.38 over the past year.
NEW YORK (AP)