(Adds details from conference call)
By Phil Wahba
March 21 Tiffany & Co forecast more
sales growth this year amid signs that the jeweler's business in
its home U.S. market is finally perking up.
The retailer, known for its Robin egg blue boxes and Fifth
Avenue flagship store in Manhattan, said on Friday that it
expects global net sales, excluding the impact of currency
fluctuations, to rise by a "high-single" digit percentage this
year, after climbing 10 percent last year.
Shares rose 2.7 percent to $93.64 in morning trading.
Tiffany reported a companywide 6 percent increase in sales
at stores open at least a year for the fourth quarter, which
ended Jan. 31.
The New York-based jewelry chain has had sluggish sales in
the last year in the United States, where many shoppers,
particularly its more frugal customers, spent less.
Specifically, the company has struggled with sales of silver
jewelry and items costing less than $500, which have a higher
profit margin than more expensive jewelry and account for a
quarter of its sales.
That trend started to abate during the holiday quarter, and
comparable sales in the Americas rose 7 percent, prompting a
Tiffany spokesman to say on a conference call that the company
was "encouraged." It was the fastest pace of growth by far for
fiscal 2013 in the region.
"They could finally be starting to turn the corner," said
Edward Jones analyst Brian Yarbrough.
Last year, Tiffany hired a new design director, Francesca
Amfitheatrof, in part to improve its lower-price assortment, and
Yarbrough said there were signs that category was starting to
catch on with shoppers. She had developed jewelry for fashion
brands, including Chanel, Fendi and Marni, prior to joining
At its Fifth Avenue store, which accounts for 8 percent of
sales, an increase in tourism from China and higher spending by
European visitors boosted sales. The store gets almost half of
its sales from foreign visitors. Other U.S. stores saw modest
sales gains after stagnating earlier in the year.
Tiffany said that its pricey fine jewelry led its sales
Comparable store sales rose 4 percent in Asia, excluding
Japan, led by gains in China, where Tiffany has been focusing
much of its expansion. Sales had been tepid in the region in
November and December, but business picked up in January, partly
helped by the earlier timing of Chinese New Year.
In Europe, sales rose 2 percent while in Japan comparable
sales rose 8 percent, excluding a sharp drop in the value of the
Overall sales rose 5.1 percent to $1.3 billion.
Tiffany also forecast a profit of $4.05 to $4.15 per share
this fiscal year, below Wall Street estimates for $4.28 a share,
according to Thomson Reuters I/B/E/S.
Analysts said that after a painful 2012, when Tiffany
lowered its bullish profit forecasts four times, the company has
grown more cautious in its projections.
The upscale New York-based jeweler reported a loss of $103.6
million, or 81 cents per share, in the fourth quarter, due
primarily to losing an arbitrations ruling against Swatch Group
. A year earlier, it recorded a profit of $179.6
million, or $1.40 a share.
Excluding the arbitration loss, which wiped out more than
half of its 2013 profit, Tiffany earned $1.47 per share in the
quarter, 5 cents below Wall Street expectations.
Tiffany is slowing its store expansion, increasing its fleet
by nine stores in 2014, after 14 last year, a move hailed by
Oppenheimer & Co analyst Brian Nagel in a research note.
(Reporting by Phil Wahba in New York; Editing by Jeffrey Benkoe
and Phil Berlowitz)