May 28, 2013
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Tiffany first-quarter sales rise more than expected

May 28, 2013

Tiffany & Co on Tuesday reported higher-than-expected sales for the first quarter that included Valentine's Day, helped by gains in all regions and promotions around the jeweler's 175th anniversary and "The Great Gatsby' movie tie-in.

Overall revenue rose 9.3 percent to $895.4 million, handily beating Wall Street expectations for $855.1 million, according to Thomson Reuters I/B/E/S. Profit also topped estimates.

Part of the Great Gatsy collection at Tiffany & Co | Source: Tiffany & Co

Comparable-store sales, excluding stores opened in the last year, rose 8 percent, a marked improvement over the holiday-season quarter, when sales were flat and concerns mounted that anxious shoppers were cutting spending on jewelry.

Last year, Tiffany's results were hurt by signs of a slowdown in China and disappointing sales of its silver jewelry, which attracts more price-sensitive customers but generates more than 25 percent of the high-end retailer's sales.

Tiffany's quarterly results echoed those of Saks and Coach in the United States, and Burberry and Italian fashion house Giorgio Armani, and further indicated luxury sales were regaining momentum.

In China, where Tiffany is pushing expansion, sales growth bolstered a 14 percent gain for the Asia business. In Japan, Tiffany's second biggest market, sales rose 2 percent, and would have been up 20 percent, if not for the impact of yen's depreciation.

In the Americas, sales advanced 6 percent, helped in part by much brisker business at its Fifth Avenue flagship store in Manhattan, where sales fell last year. The store generates about one-twelfth of companywide revenue.

Tiffany also designed jewelry for the Hollywood hit "The Great Gatsby," a tie-in the attracted a lot of attention.

Still, the jeweler kept to its earlier profit forecast, pointing to lingering softness in the Americas and the impact of yen's depreciation.

Tiffany expects annual profit at $3.43 to $3.53 per share.

For the quarter ended April 30, New York-based Tiffany's earnings rose to $83.6 million, or 65 cents per share, from $81.5 million, or 64 cents a share, a year earlier.

Excluding costs associated with a move to new offices last year, Tiffany earned 70 cents a share, while Wall Street expected 52 cents.

Shares were up 5 percent to $80 in light premarket trading.

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