(Reuters) - Tiffany & Co (TIF.N) blew past analysts’ estimates in the first quarter and raised its full-year forecast for profit and sales as a plan to target millennials and sell household items attracted more shoppers, sending its shares to an all-time high.
Shares surged 20 percent and were on track for their best day in more than 17 years as the upscale jeweler posted its strongest rise in same-store sales in four years, driven by China-led growth in Asia and strong sales in its domestic market.
Tiffany has revamped its product lines and added cheaper items as part of a turnaround led by new Chief Executive Officer Alessandro Bogliolo to compete with popular jewelers including Denmark’s Pandora A/S (PNDORA.CO) and Blue Nile.
“New product offerings resonated with consumers, and with its Paper Flowers collection of platinum and diamond jewelry rolling out, Tiffany should continue to fare well,” said Ken Perkins, founder of research firm Retail Metrics.
The company’s sales in the Americas, its biggest market, rose 9 percent, while Asia-Pacific sales jumped 28 percent in the three months ended April 30. Sales in Europe were up 13 percent.
“With local customers the trend has been positive in every single region including Europe,” Bogliolo told Reuters, adding that investments made in the last two quarters are working.
Sales in the jewelry collections category, which includes brands such as TIFFANY T and HardWear, rose 18 percent, while its engagement category saw an 11 percent increase in sales in the quarter.
Tiffany has been investing in developing its website and boosting its marketing and store presentations. Despite these investments, the company boosted margins, which rose to 63 percent from 62.1 percent from a year earlier.
Overall same-store sales rose 7 percent on a constant currency basis. Analysts on average had expected an increase of 2.7 percent.
Tiffany now expects earnings per share of $4.50 to $4.70 for the year ending January 2019, compared with the prior forecast of $4.25 to $4.45 per share.
First-quarter net sales rose 14.8 percent to $1.03 billion, topping analysts’ estimates of $959.4 million, according to Thomson Reuters I/B/E/S.
Excluding one-time items, the company earned $1.14 per share, while Wall Street analysts had expected 83 cents per share.
Reporting by Vibhuti Sharma, Aishwarya Venugopal in Bengaluru ; Additional Reporting by Melissa Fares in New York; Editing by Arun Koyyur and Anil D'Silva