Tiffany & Co. (TIF) Reports 4% Growth in Holiday Sales, Led by Asia-Pac

January 10, 2013 7:06 AM EST
Tiffany & Co. (NYSE: TIF) today reported its sales growth for the two-month period ended December 31st. Management also updated its financial outlook.

Worldwide net sales increased 4% to $992 million. On a constant-exchange-rate basis that excludes the effect of translating foreign-currency-denominated sales into U.S. dollars (see “Non-GAAP Measures” schedule), worldwide net sales also rose 4% and comparable store sales were unchanged from the prior year.

Net sales highlights were as follows:

* Sales in the Americas region increased 3% to $516 million in the holiday period. On a constant-exchange-rate basis, total sales increased 2%, and comparable store sales declined 2% in the New York flagship store and in branch stores. Performance was relatively similar across much of the region. Internet and catalog sales rose 4%.
* Sales in the Asia-Pacific region increased 13% to $187 million. On a constant-exchange-rate basis, total sales increased 11% (due to growth in Greater China and most other markets) and comparable store sales rose 7%.
* In Japan, total sales of $153 million were 5% below the prior year. However, on a constant-exchange-rate basis, both total sales and comparable store sales rose 1%.
* In Europe, sales increased 2% to $119 million due to mixed performances by country. On a constant-exchange-rate basis, total sales also increased 2% and comparable store sales were equal to the prior year.
* Other sales increased 114% to $17 million, largely reflecting the conversion in July of five TIFFANY & CO. stores in the United Arab Emirates from independently-operated distribution to Company-operated retail stores.
* At December 31, 2012, the Company operated 274 stores (115 in the Americas, 65 in Asia-Pacific, 55 in Japan, 34 in Europe and five in the U.A.E.), compared with 246 stores (102 in the Americas, 57 in Asia-Pacific, 55 in Japan and 32 in Europe) a year ago.

Michael J. Kowalski, chairman and chief executive officer, said, “Holiday period sales growth was at the low-end of our expectations, and we now expect that net earnings for the year ending January 31st will be at the lower-end of the forecast that we issued on November 29th of $3.20 - $3.40 per diluted share. Looking forward, we are formulating plans for continued store expansion and new product introductions in 2013. We will provide detailed financial guidance when we report our full year results in March but, due to uncertainty about general economic conditions in all our major markets, management is planning sales growth conservatively for 2013 and at this point expects net earnings growth of 6% - 9%.”

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