(Adds analyst comments, details; updates shares)
By Devika Krishna Kumar
May 21 Tiffany & Co raised its full-year
profit forecast after the jewelry chain reported
better-than-expected quarterly results as new collections drove
sales in the United States, its biggest market.
Shares of Tiffany, known for its blue boxes and its Fifth
Avenue flagship store in Manhattan, rose as much as 10 percent
on Wednesday morning, making the stock one of the top percentage
gainers on the New York Stock Exchange.
Tiffany has been struggling for the past two years to find
the right balance between the pricey jewelry for which it is
known and cheaper silver items that generate a quarter of sales.
Edward Jones analyst Brian Yarbrough said Tiffany's U.S.
business had lagged other regions for several quarters, mainly
as it was weak in lower-priced silver jewelry category.
"Strength in fine and statement jewelry sales continued,
while sales of our new or expanded jewelry collections
accelerated, led by our ATLAS collection," Chief Executive
Michael Kowalski said in a statement.
Tiffany's fine jewelry is priced a few thousand dollars,
while statement jewelry pieces can go as high as $50,000 and
The Atlas Collection is a new range that focuses on silver
jewelry - including lariats, rings and pendants - priced below
$500. Tiffany's profit margin in these pieces is higher than in
The company's Fifth Avenue store, which accounts for 8
percent of its overall sales, has benefited as more tourists
visit the marquee store and spend more on jewelry.
International visitors to the United States spent $15.4
billion in March, according to the U.S. Department of Commerce.
Yarbrough said Tiffany was now seeing broad-based strength
in the country, whereas growth earlier was led by its Fifth
"They're gaining acceptance outside of just tourists," he
Tiffany, which is usually cautious in its outlook, said
earnings would be flat in the current quarter.
The company raised its earnings forecast for the year ending
Jan. 31 to $4.15-$4.25 per share from $4.05-$4.15 per share.
Comparable-store sales in the Americas, which account for
nearly half of Tiffany's overall sales, rose 8 percent excluding
currency fluctuations in the first quarter ended April 30.
Net profit rose 50 percent to $125.6 million, or 97 cents
per share, while total sales rose 15 percent to $1 billion on a
Analysts on average had expected a profit of 78 cents per
share on sales of $956.3 million, according to Thomson Reuters
Company-wide sales at stores open at least a year rose 11
percent on a constant-currency basis in the first quarter.
Tiffany's shares were up 9.8 percent at $96.88 in late
morning trading on Wednesday.
(Editing by Kirti Pandey)