Tiffany’s 2010 sales exceed expectations

Posted March 29, 2011 | By Sonia Nair

Luxury jeweller Tiffany & Co reported a 14 per cent increase in its worldwide net sales for 2010 on the back of strong fourth quarter sales.

Tiffany chairman and chief executive Michael J Kowalski attributed the positive sales results to new store openings in the Americas, Asia Pacific and Europe as well as successful new products such as its yellow diamond collection.

“These strong fourth quarter sales, which were better than the holiday results we had previously reported, were the culmination of an excellent year of strong earnings growth for Tiffany,” Kowalski said.

The increase in net sales resulted in a 39 per cent increase in worldwide net earnings to $368.4 million. The jewellery giant opened 15 stores in 2010, seven of which were in Asia Pacific.

The Asia Pacific territory recorded the biggest leap in sales, with a 29 per cent increase to $549.2 million. The region now constitutes 18 per cent of Tiffany’s worldwide sales.

Tiffany expects to increase its Asia Pacific sales by a further 20 per cent in 2011 and plans to open another eight stores in the region.

Following better than expected 2010 results, Tiffany is optimistic for the upcoming year and expects to increase its worldwide net sales by 12 to 14 per cent.

Based on sales results so far this year, Tiffany said it was on track to exceed expectations in its first quarter, which ends on March 11.

However, the company was forced to reduce its global first quarter forecast due to the recent earthquake and tsunami in Japan, which had led to store closures and limited opening hours in that country and negatively affected trading.

“Tiffany stores located in the Kanto and Tohoku regions, which generate somewhat more than half of sales in Japan, were closed or operating on reduced hours after the earthquake and tsunami, with physical damage limited to a few stores,” Kowalski said.

“We cannot provide meaningful forecasts about sales in Japan beyond the first quarter, and, therefore, have not adjusted our sales or earnings plan for the remaining quarters of 2011,” he added.

Tiffany has seven stores in Australia, two each in New South Wales, Victoria and Queensland as well as one in Western Australia.

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