Tiffany & Co. (TIF) Tops Q2 EPS by 11c; Boosts FY14 EPS Outlook

Tiffany & Co. (NYSE: TIF) reported Q2 EPS of $0.96, $0.11 better than the analyst estimate of $0.85. Revenue for the quarter came in at $993 million versus the consensus estimate of $987.9 million.

Michael J. Kowalski, chairman and chief executive officer, said, “These healthy second quarter results reflected solid sales growth in our stores, particularly in the Americas and Asia-Pacific regions. In addition, an improved gross margin was an important contributor to the earnings growth. We were also pleased with solid performance across most product categories, ranging from the success of perennial classics in fine, statement and engagement jewelry to our newest ATLAS collection, and we are excited about the current debut of our new TIFFANY T jewelry collection.”

• n the Americas, total sales rose 9% in the second quarter to $484 million and increased 8% in the first half to $922 million. On a constant-exchange-rate basis, total sales rose 10% in the quarter and 9% in the half reflecting geographically-broad-based growth across most of the region, while comparable store sales were up 8% in both periods.
• In Asia-Pacific, total sales increased 14% in the second quarter to $237 million and rose 15% in the first half to $498 million. On a constant-exchange-rate basis, total sales rose 13% in the second quarter and 16% in the first half with comparable store sales up 7% and 9%, respectively, due to strong growth in Greater China and Australia.
• In Japan, total sales declined 13% in the second quarter to $119 million (a 10% decline on a constant-exchange-rate basis). As expected, the second quarter’s sales decline reflected a softening of customer demand after exceptionally strong 20% total sales growth in the first quarter (a 29% increase on a constant-exchange-rate basis) when customers had accelerated their purchases in anticipation of an increase in Japan’s consumption tax on April 1st. Management noted that, after a substantial sales decline in April, the Company experienced sequentially smaller rates of monthly sales declines during the second quarter. In the first half, total sales rose 4% to $293 million (a 10% increase on a constant-exchange-rate basis). Comparable store sales on a constant-exchange-rate basis declined 13% in the quarter and increased 9% in the half.
• In Europe, total sales increased 8% in both the second quarter and first half to $120 million and $221 million, respectively. On a constant-exchange-rate basis, total sales increased 1% in the quarter and 2% in the half; comparable store sales declined 8% and 5%, respectively, reflecting weak performance in the U.K. and most of continental Europe.
• Other sales rose 28% in the second quarter to $33 million and 34% in the first half to $71 million. The increases were primarily due to retail sales growth reflecting the opening of the first Company-operated TIFFANY & CO. store in Russia, as well as 2% and 10% comparable store sales growth in the United Arab Emirates.

Tiffany & Co. sees FY2014 EPS of $4.20-$430, versus prior guidance of $4.15 - $4.25 and the consensus of $4.29.

For earnings history and earnings-related data on Tiffany & Co. (TIF) click here.

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