Tiffany & Co. (TIF) Reports In-Line Q4 EPS

Tiffany & Co. (NYSE: TIF) reported Q4 EPS of $1.51, in-line with the analyst estimate of $1.51. Revenue for the quarter came in at $1.3 billion versus the consensus estimate of $1.31 billion.

Net sales highlights by region were as follows:

• In the Americas, both total and comparable store sales on a constant-exchange-rate basis in the fourth quarter were equal to the prior year due to softness across the U.S. Management believes recent strength of the U.S. dollar is having a negative effect on spending by foreign tourists. In the full year, both total sales and comparable store sales on that basis rose 6% due to geographically-broad-based growth across the region. As reported in U.S. dollars, total sales declined 1% to $653 million in the fourth quarter and rose 6% to $2.0 billion in the full year.
• In the Asia-Pacific region, total sales on a constant-exchange-rate basis rose 7% and comparable store sales rose 3% in the fourth quarter with noteworthy sales growth in China, Australia and Singapore, and softness in Hong Kong; on that basis for the full year, total and comparable store sales increased 10% and 4%, respectively, due to sales growth in most markets. As reported in U.S. dollars, total sales increased 4% to $284 million in the fourth quarter and rose 9% to $1.0 billion in the full year.
• In Japan, on a constant-exchange-rate basis, total sales increased 1% in the fourth quarter and comparable store sales declined 5% which management attributes to weak economic conditions affecting consumer spending; on that basis for the full year, total sales increased 4% and comparable store sales rose 1%. As reported in U.S. dollars, total sales in Japan declined 13% to $148 million in the fourth quarter and 4% to $554 million in the full year.
• In Europe, total sales on a constant-exchange-rate basis increased 9% in the fourth quarter due to growth in major markets in continental Europe and comparable store sales rose 4%; on that basis for the full year, total sales rose 6% and comparable store sales declined 1%. As reported in U.S. dollars, total sales of $162 million in the fourth quarter were unchanged from the prior year, while total sales of $497 million in the full year were 6% above the prior year.
• Other sales increased 12% to $39 million in the fourth quarter and rose 26% to $140 million in the full year, with the growth largely driven by sales in Tiffany’s new store in Moscow which opened in February 2014. Comparable store sales declined 8% in the fourth quarter and increased 8% in the full year. Wholesale sales of diamonds increased in both periods.
• Tiffany opened eight and closed two Company-operated stores in 2014. At January 31, 2015, the Company operated 295 stores (122 in the Americas, 73 in Asia-Pacific, 56 in Japan, 38 in Europe, and included in Other sales are five in the United Arab Emirates and one in Russia), versus 289 stores a year ago (121 in the Americas, 72 in Asia-Pacific, 54 in Japan, 37 in Europe and five in the U.A.E.).

Outlook for 2015:

For the fiscal year ending January 31, 2016, management is forecasting minimal growth in net earnings per diluted share from the $4.20 (excluding charges) earned in fiscal 2014. This forecast anticipates a decline of approximately 30% in the first quarter’s net earnings and a more modest decline in the second quarter, followed by expected double-digit percentage net earnings increases in the third and fourth quarters.

• Worldwide net sales increasing by a mid-single-digit percentage on a constant-exchange-rate basis with sales growth in all regions. The strong U.S. dollar is expected to have an adverse translation effect on sales throughout fiscal 2015 and, therefore, result in a low-single-digit percentage increase for the full year when reported in U.S. dollars.
• Additionally, worldwide net sales in the first quarter are expected to decline by approximately 10%, as reported in U.S. dollars, primarily due to a difficult comparison to strong sales growth achieved in Japan in last year’s first quarter and continued softness currently being experienced in the Americas; worldwide net sales are expected to increase by a low-single-digit percentage, as reported in U.S. dollars, in the second quarter.

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

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