Strong Aussie demand for Tiffany & Co

Posted May 27, 2014 | By Emily Mobbs • Former Editor

Tiffany & Co’s latest financial results show a 17 per cent sales increase in the Asia-Pacific region, with the company reporting noteworthy trading conditions in Australia and Greater China.

Total sales for the region were US$261 million (AU$282.8 m) for the first quarter, ended 30 April 2014, and same store sales increased 10 per cent.

Worldwide net sales for the New York-based retailer increased 13 per cent to US$1 billion (AU$1.08 b) for the period. This figure, combined with an improved operating margin, contributed to a 50 per cent rise in net earnings to US$126 million (AU$136.5 m) or US$0.97 (AU$1.05) per diluted share.

Michael Kowalski, Tiffany & Co chairman and CEO

Tiffany chairman and CEO, Michael Kowalski, cited continued strong sales in fine and statement jewellery, with accelerated demand for the company’s new or expanded collections, particularly its Atlas range.

“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 said.

Worldwide view
From a global perspective, total sales in the Americas region increased eight per cent to US$439 million (AU$475.7 m), while revenue in Japan surged 20 per cent to US$174 million (AU$188.5 m).

Strong demand for jewellery in Japan was noted in March, which was said to reflect consumers’ response to the long-anticipated increase in the country’s consumption tax that took effect on 1 April.

Sales in Europe rose nine per cent to US$101 million (AU$109.4 m) and other sales increased 39 per cent to US$37 million (AU$40.1 m) – the result was primarily attributed to retail sales that included an 18 per cent rise is same store sales in the United Arab Emirates (UAE) and the opening of the first company-owned store in Russia.

In addition to the Russian store, Tiffany & Co opened three other outlets in the first quarter, including a major store on the Champs Elysees in Paris. It also closed one in the United States.

At 30 April, the company operated 292 stores – an addition of 17 stores from the previous year.

Based on the results, Tiffany & Co has increased its earnings forecast for the current fiscal year to net earnings in a range of US$4.15–US$4.25 (AU$4.49–AU$4.6) per diluted share, versus its previously-published forecast of US$4.05–US$4.15 (AU$4.4–AU$4.5) per diluted share.

The company also plans to open 13 stores this year – five in the Asia-Pacific region – and close four existing stores.

Tiffany & Co currently operates six stores in Australia and one duty-free outlet in New Zealand.