* Q4 EPS $0.85 versus Wall Street view $0.78
* Q4 sales down 20 percent to $841.2 million
* Assuming fiscal 2009 sales down about 11 pct
* Sees 2009 EPS $1.50-$1.60 from cont. ops, St. view $1.73
* Shares jump 13.1 pct
(Recasts with company comments, analyst comments, byline)
By Aarthi Sivaraman
NEW YORK, March 23 Tiffany & Co (TIF.N) posted
a lower quarterly profit on Monday, but trumped Wall Street's
expectations, as the upscale jeweler kept a tight lid on costs
to combat sharply lower sales, sending its shares up 13.1
Tiffany warned that it has not seen any signs of a
turnaround yet and forecast lower sales and disappointing
earnings for the current year.
Despite facing a rough time, the retailer said it would not
bow to economic pressure and cut prices -- a possibility that
is widely considered detrimental to the jewelry brand in the
"We have an unwavering commitment to the integrity of the
Tiffany & Co brand and will not seek short-term compromises,"
CEO Michael Kowalski said during a call with analysts.
Tiffany said it would still open 13 new stores this year,
unveil new items and focus on marketing to attract shoppers.
Its shares got a boost from the better-than-expected
profit, said Edward Jones analyst Matt Arnold.
"More than anything else, (it was) the upside surprise in
the current quarter," Arnold said, also pointing to the uptick
in the overall market. [nN23263654]
Investors could also be rewarding the stock after Tiffany
allayed their fears of a darker outlook, said Cowen & Co
analyst Laura Champine.
"I think people expected even worse guidance," she said.
For the current fiscal year, which ends in January 2010,
Tiffany said it is assuming that sales will fall about 11
percent. It expects full-year earnings of between $1.50 and
$1.60 per share from continuing operations.
Analysts expect it to earn $1.73 a share on that basis.
HIGH-END NO EXCEPTION
Stores that sell high-end merchandise were among the last
to face the repercussions of the recession, but have also
fallen prey to consumer cutbacks in recent months.
Tiffany said its sales sank more than 20 percent so far in
the current quarter, the latest sign that consumers around the
world -- even affluent ones -- are still holding back on
discretionary purchases as the economic downturn shows no signs
Tiffany's net profit fell to $31.1 million, or 25 cents per
share, in the fiscal fourth quarter ended Jan. 31, compared
with $127.4 million, or 96 cents per share, a year earlier.
Excluding one-time items such as restructuring it earned 85
cents a share, topping the average analyst estimate of 78 cents
a share, according to Reuters Estimates.
Sales fell 20 percent to $841.2 million, with the decline
in the Americas region hurting it the most. While items across
all price ranges suffered, sales declines were larger for
jewelry with a price tag above $50,000, Tiffany said.
Sales fell 3 percent in the Asia-Pacific region and 2
percent in Europe. Even its flagship store in Manhattan, which
is usually inundated with tourists, faced a 34 percent sales
decline in the fourth quarter.
For the current year, Tiffany expects sales declines in the
mid-teens percentage in the Americas region and
high-single-digit percentage in Europe. It also forecast a 33
percent drop in capital expenditures to $100 million.
The New York-based retailer offered early retirement
packages to about 800 employees late last year, of which 600
took the offer, Tiffany said.
Combined with more job cuts, and closing its Iridesse
pearl jewelry stores, Tiffany expects a 10 percent cut in its
total worldwide staff, and about $60 million in pre-tax savings
in 2009, the company said.
Tiffany shares were up $2.64 at $22.87 on the New York
(Reporting by Aarthi Sivaraman; Editing by Steve Orlofsky,