4 Min Read
* 2nd-quarter profit, sales beat estimates
* Americas, Asia-Pacific sales growth buoys results
* Raises full-year profit view to $4.20-$4.30 from $4.15-$4.25
* Shares rise to a life high of $105.65 (Adds background, details from conference call, graphic link)
Aug 27 (Reuters) - Upscale jeweler Tiffany & Co raised its full-year profit forecast for a second time following a better-than-expected rise in quarterly profit, driven by strong sales and higher prices for its high-end jewelry in the Americas, its biggest market.
Tiffany's shares rose 4.9 percent to a record high of $105.65 in early trading on Wednesday after the company posted its strongest sales growth in the Americas in nearly two years.
Sales in the region, which accounts for nearly half of overall sales, rose 10 percent, excluding currency fluctuations, in the second quarter ended July 31 - stronger than the 7 percent overall growth in the period and the first double digit growth since the third quarter of 2011.
Tiffany had been struggling for the past two years to find the right balance in the United States between the pricey jewelry for which it is known and cheaper silver items that generate a quarter of sales.
The rebound was evident at its Fifth Avenue flagship store in Manhattan where sales rose, helped by higher spending by tourists from China and Europe and more Americans shoppers. The store accounts for 8 percent of revenue.
"If they can get the U.S. business going and they can get the silver business going, that would be a very positive impact to profit margins," Edward Jones analyst Brian Yarbrough said. "I think you're starting to see some signs of that."
Gross margin increased to 59.9 percent in the second quarter from 57.5 percent a year earlier due to lower raw material costs and higher average selling prices.
"We were ... pleased with solid performance across most product categories, ranging from the success of perennial classics in fine, statement and engagement jewelry to our newest Atlas collection," said Chief Executive Michael Kowalski, who recently announced plans to retire next year.
That helped Tiffany, which is usually cautious in its outlook, raise its earnings forecast for the year ending Jan. 31 to $4.20-$4.30 per share from $4.15-$4.25.
The forecast was slightly better than the average analyst estimate of $4.29, according to Thomson Reuters I/B/E/S.
The 10 percent rise in Americas sales in the quarter was bettered by a 13 percent rise in sales in the Asia-pacific region, excluding Japan.
Same-store sales increased 8 percent in the Americas and 7 percent in Asia-Pacific. Total same-store sales rose 3 percent.
Tiffany's net income rose 16 percent to $124.1 million, or 96 cents per share. Net sales rose 7.2 percent to $992.9 million.
Analysts on average had expected a profit of 85 cents per share on revenue of $987.9 million.
Tiffany's shares were up 1.3 percent at $102.06 in midday trading. Up to Tuesday's close, the stock has risen 8.6 percent this year, outstripping the 1.9 percent rise in the S&P 500 retailers index. (Reporting by Devika Krishna Kumar and Ramkumar Iyer in Bangalore; Editing by Savio D'Souza)