Tiffany & Co. (TIF) Tops Q1 EPS Views; Comps Up 11%; Boosts FY14 Outlook

(Updated - May 21, 2014 7:05 AM EDT)

Tiffany & Co. (NYSE: TIF) reported Q1 EPS of $0.97, $0.19 better than the analyst estimate of $0.78. Revenue for the quarter came in at $1.01 billion versus the consensus estimate of $955.05 million.

Comps rose 11 percent, on a constant-exchange-rate basis, versus consensus views looking for a 4.8 percent gain.

Michael J. Kowalski, chairman and chief executive officer, said, “This is an excellent and encouraging start to the year. 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. Strength in fine and statement jewelry sales continued, while sales of our new or expanded jewelry collections accelerated, led by our ATLAS collection.”

Net sales highlights were as follows:

• In the Americas region, total sales increased 8% to $439 million. On a constant-exchange-rate basis, total sales rose 9% and comparable store sales rose 8%, primarily due to geographically broad-based growth across the U.S.
• In the Asia-Pacific region, total sales rose 17% to $261 million. On a constant-exchange-rate basis, total sales increased 19% and comparable store sales rose 10% with noteworthy growth throughout Greater China and in Australia.
• In Japan, total sales surged 20% to $174 million. On a constant-exchange-rate basis eliminating the negative effect of a weaker yen versus the U.S. dollar, total sales and comparable store sales rose 29% and 30%. Management noted exceptionally strong customer demand in March, which reflected the Japanese consumer's response to the long-anticipated increase in Japan’s consumption tax which took effect on April 1st. After the tax increase became effective, as expected the Company has experienced sales declines but management is not changing its initial full-year expectation for a healthy rate of sales growth.
• In Europe, total sales rose 9% to $101 million. On a constant-exchange-rate basis, total sales rose 2% and comparable store sales declined 3%. Trends were similar in the U.K. and in continental Europe.
• Other sales increased 39% to $37 million, primarily due to retail sales growth which included 18% comparable store sales growth in the United Arab Emirates and the opening of the first Company-operated TIFFANY & CO. store in Russia. Other sales also benefited from an increase in wholesale sales of diamonds; such diamonds are a result of the Company's rough diamond sourcing operations.
• Tiffany opened four stores in the first quarter (including a major store on the Champs Elysees in Paris) and closed one in the U.S. At April 30, 2014, the Company operated 292 stores (121 in the Americas, 72 in Asia-Pacific, 55 in Japan, 38 in Europe, five in the U.A.E. and one in Russia), versus 275 stores (115 in the Americas, 66 in Asia-Pacific, 55 in Japan, 34 in Europe and five in the U.A.E.) a year ago.

Tiffany sees FY2014 EPS of $4.15 - $4.25, versus prior guidance of $4.05 - $4.15 and the consensus of $4.17.

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

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