Friday, March 22, 2013 5:52 pm
Tiffany 4Q net income rises less than 1 pct
By ANNE D'INNOCENZIOAP Retail Writer
The upscale jewelry company also offered an annual sales outlook that topped analysts' estimates, and its shares rose nearly 2 percent Friday.
The results, which include the critical holiday season, show Tiffany's resilience even as it faces challenges in the U.S. and a fiscal crisis in Europe.
For the quarter ended Jan. 31, Tiffany earned $179.6 million, or $1.40 per share. Revenue rose 4 percent to $1.24 billion.
Analysts polled by FactSet expected earnings of $1.36 per share on $1.25 billion in revenue.
"While financial results in fiscal 2012 were disappointing due to lower-than expected sales growth and pressures on gross margin, we continued to maintain a longer term focus on strengthening global awareness of the Tiffany & Co. brand," Michael J. Kowalski, Tiffany's chairman and chief executive officer, said in a statement.
Total sales in the Americas region increased 2 percent to $620 million in the fourth quarter and 2 percent to $1.8 billion in the full year. The area represents 48 percent of last year's global revenue. Revenue at stores open at least a year declined 2 percent in both the quarter and full year on a constant exchange rate basis. Sales in the New York flagship store dropped 3 percent in both the quarter and full year, while that figure dropped 2 percent for its branch locations for both periods.
In the Asia-Pacific region, total sales rose 13 percent to $254 million in the fourth quarter and 8 percent to $810 million in the full year. The region represents 21 percent of worldwide sales. On a constant exchange rate basis, total sales rose 10 percent in the fourth quarter due to sales growth in Greater China and in other markets and rose 8 percent in the full year. On that basis, revenue at stores opened at least a year rose 6 percent in the quarter and 2 percent for the full year.
Total sales in Japan declined 6 percent to $192 million in the fourth-quarter, reflecting a weaker Japanese yen versus the U.S. dollar and increased 4 percent to $639 million or 17 percent of worldwide sales in the full year. However, on a constant exchange rate basis, total sales rose 2 percent in the quarter and 6 percent in the full year. On that basis, revenue at stores opened at least a year rose 2 percent and 7 percent in the quarter and full year respectively.
In Europe, total sales rose 3 percent to $146 million in the fourth quarter due to mixed performance by country and also rose 3 percent to $432 million or 11 percent of worldwide sales in the full year. On a constant exchange rate basis, total sales rose 3 percent and 7 percent in the quarter and full year respectively. Revenue at stores opened at least year were unchanged in the quarter and rose 2 percent in the full year.
The New York-based jewelry company also says it expects its first-quarter earnings from operations will fall about 15 percent to 20 percent as a result of profitability pressures and higher marketing costs, but pick up later in the year.
For the current year, Tiffany expects sales growth of 6 percent to 8 percent, which means that sales are expected to be anywhere from $4.02 billion to $4.09 billion. Analysts project $4.02 billion
It expects full-year earnings of $3.43 per share to $3.53 per share. Analysts expect $3.46 per share.
Tiffany shares rose $1.32, or 1.9 percent, to close at $69.23 Friday.