Strong Japanese sales help Tiffany to beat forecasts
Jeweller reports growth in high-margin products such as $10,500 bracelet
Tiffany has struggled at the lower end of its product range. Photograph: Reuters
Tiffany reported bigger-than-expected quarterly profit and sales, helped in part by higher sales of wholesale diamonds and strong demand for its fashion and designer jewellery in Japan.
The company’s shares rose 3 per cent to $91.40 (€77.50) before the bell on Thursday.
The New York-based retailer said it also benefitted from sales of high-margin jewellery, such as the Tiffany T collection, which was first crafted by its former design director Francesca Amfitheatrof.
The collection features items such as the $10,500 square bracelet with pave diamonds in 18 carat white gold.
The company, which gets about 15 per cent of its revenue from Japan, saw comparable sales rise 3 per cent in the region in the reported quarter.
Sales at established stores open for more than a year fell 2 per cent, steeper than the 1 per cent fall expected by analysts polled by research firm Consensus Metrix.
Comparable sales in the Americas, its biggest market, fell 1 per cent due to lower tourist spending and weak demand across categories other than fashion and designer jewellery.
Tiffany had also appointed Coach’s former creative director Reed Krakoff as its chief designer in January, to launch newer designs and better compete with millennial-centric brands.
Net sales rose 3 per cent to $959.7 million in the second quarter ended July 31st, beating the analysts’ average estimate of $930.3 million, according to Thomson Reuters.
Shares of Signet Jewelers, which sells jewellery at lower prices than Tiffany, were up 15 per cent on Thursday after it reported better-than-expected sales and said would buy the parent company of online jeweller JamesAllen.com R2Net, for $328 million.
Net income rose to $115 million, or 92 cents per share, in the second quarter, from $105.7 million, or 84 cents per share, a year earlier.
Analysts had expected the company to earn 84 cents per share.