UPDATE 2-Britain fines Pfizer record $107 mln for huge drug price hike
* Drugmakers dispute decision and plan to appeal (Adds Flynn reaction, more on generic drug price controversy)
By Phil Wahba
Aug 27 Tiffany & Co's strong sales in China and higher prices made up for some disappointing business in its home market in the latest quarter, leading the U.S. jeweler on Tuesday to raise its profit forecast for the year.
There were fears this summer that luxury spending in China might slow as the economy there weakened, but Tiffany is the latest Western brand to report good sales there. Prada SpA and Coach Inc recently posted big gains in the world's fastest-growing market for luxury goods.
Sales at stores open at least a year in Asia, except for Japan, rose 13 percent in the second quarter ended July 31, helped largely by China.
But same-store sales were unchanged in the Americas, which is still Tiffany's biggest market. This suggests the company may have faced the same summer pullback by U.S. shoppers that dented sales at chains ranging from Saks Inc to Target Corp .
"Business in the Americas is light," said Edward Jones analyst Brian Yarbrough. Tiffany continues to struggle with low-end jewelry sales, he added.
Tiffany executives told analysts on a conference call that tourists' purchases had helped business tick up at the Fifth Avenue flagship in New York, which generates about one-eighth of sales. Elsewhere, though, there was still reason to be prudent, they said.
"We are maintaining a cautious sales outlook for the Americas until we see solid evidence of an upturn," Chief Financial Officer Patrick McGuiness said.
Shares of Tiffany rose 0.1 percent to $81.75 in morning trading.
An Ipsos poll conducted for Reuters earlier this month found 35 percent of Americans planned to spend less on jewelry in the 2013 holiday season, while only 5 percent expected to spend more.
Tiffany said it still expected net sales worldwide to increase by a mid-single-digit percentage rate for the year, including the effect of the strong dollar.
The company has struggled to find the right mix of the expensive jewelry for which it is known and the more-affordable silver items, typically less than $500, that generate 25 percent of sales and comprise its most profitable category.
Still, the pickup in business outside the Americas, where Tiffany is focusing its expansion, reassured Wall Street that the jeweler's growth prospects remain good, Yarbrough said.
Sales in Asia outside Japan now account for about 22 percent of overall revenue, compared with 11 percent five years ago.
The company, famed for its robin's egg blue boxes, said global sales rose 4.4 percent to $925.9 million in the second quarter, below the $941.4 million analysts were expecting, according to Thomson Reuters I/B/E/S.
Sales growth would have been 8 percent if not for the strong U.S. dollar, which reduces the value of goods sold overseas.
Same-store sales climbed 5 percent, in line with estimates. Excluding currency fluctuations, they were up 7 percent in Europe and 8 percent in Japan.
Despite strong demand for high-end jewelry in Japan, overall sales there fell 14 percent because of the weak yen.
Second-quarter net income rose to $106.8 million, or 83 cents per share, from $91.8 million, or 72 cents per share, a year earlier.
Per-share profit beat the average Wall Street estimate by 9 cents, helped by lower pressure from diamond and gold costs.
Tiffany said price increases in some categories had not deterred shoppers.
The company now expects a profit of $3.50 to $3.60 per share for the full fiscal year, up 7 cents from its previous forecast range.
Last year, Tiffany's shares came under attack after it repeatedly lowered its forecasts.
TAIPEI, Dec 7 Taiwan's exports in November grew at their strongest pace in nearly four years, as global retailers stocked up on the island's hi-tech gadgets for the year-end shopping season, but analysts said momentum will fade as seasonal demand peaks.
MUMBAI, Dec 7 India's central bank unexpectedly kept its policy repo rate unchanged at 6.25 percent on Wednesday, despite calls for action as an intense cash shortage threatens to slam the brakes on the world's fastest growing large economy.