The National  Memo Logo

Smart. Sharp. Funny. Fearless.

Monday, December 09, 2019 {{ new Date().getDay() }}

NEW YORK (AP) — Tiffany & Co. said Tuesday that its fourth-quarter profit slipped, as wealthy customers continued to buy up its priciest items but demand for its more modest jewelry fell.

The lower-than-expected earnings broke a five-quarter streak of better-than-expected results for the upscale jeweler. But the company was optimistic about its prospects for 2012, predicting both higher profits and revenue.

The news sent shares of the company known for its iconic turquoise box soaring $5.09, or 7.4 percent, to $71.77.

The quarterly results didn’t come as a complete surprise. After posting solid results for the first three quarters of the year, Tiffany cut its 2011 profit prediction in January, saying that its U.S. and European sales weakened significantly during the holiday season as customers pulled back on high-end jewelry spending.

For the quarter ended Jan. 31, Tiffany reported net income of $178.4 million, or $1.39 per share, down from $181.2 million, or $1.41 per share, in the same quarter of 2010. Results fell below the $1.42 per share analysts polled by FactSet were expecting.

Revenue rose 7.8 percent to $1.19 billion from $1.1 billion, matching analysts’ predictions. The company said its revenue at stores open at least a year — an indicator of a retailer’s health — rose 5 percent, as the average price per unit sold increased. The increase in average price was partially a result of higher metals and diamond costs that were passed on to customers.

European sales increased just 3 percent to $142 million. Asia-Pacific sales jumped 19 percent to $225 million and Japan sales rose 12 percent to $204 million.

Sales in the company’s Americas region — which includes the U.S., Canada and Latin America — rose 5 percent to $605 million on a same-store sales increase of 3 percent. In the Americas, sales of items priced below $250 fell, while demand increased for most of the company’s higher priced product categories, company executives said on a conference call with investors.

The company said that some of the slow sales growth might have stemmed from restrained spending by people employed in the financial industry on the East Coast of the United States. In addition, higher silver costs, and the resulting product price increases, may have scared off some entry-level buyers, Tiffany said.

For the full year 2011, Tiffany reported net income of $439.2 million, or $3.40 per share, up from $368.4 million, or $2.87 per share, in 2010. Revenue rose to $3.64 billion from $3.09 billion.

Tiffany projected a 2012 profit of $3.95 to $4.05 per share, ahead of average Wall Street predictions of $3.93 per share. Revenue is expected to rise about 10 percent, largely as a result of higher Asia-Pacific and Americas spending, the company said.

Based on Tiffany’s 2011 results, the guidance suggests $4.01 billion in sales, well ahead of average analysts’ predictions of $3.91 billion.

Collins Stewart analyst Laura Champine backed her “Neutral” rating for Tiffany, but boosted her price target for the company by $3 to $69.

Champine said the company’s guidance “reflects aggressive expectations in the Americas,” in light of the recent slowdown in sales. She also noted that most of the sales growth in the Americas last year was driven by higher prices.

Tiffany said it expects to open 24 new stores this year, including five in the United Arab Emirates, marking its debut in that market.


Start your day with National Memo Newsletter

Know first.

The opinions that matter. Delivered to your inbox every morning

Lt. Gov. Janice McEachin

The Republican Party’s radical right flank is making inroads among voters and winning key primaries east of the Mississippi. But out West, among the five states that held their 2022 primary elections on May 17, a string of GOP candidates for office who deny the 2020’s presidential election results and have embraced various conspiracies were rejected by Republicans who voted for more mainstream conservatives.

In Pennsylvania, Douglas Mastriano, an election denier and white nationalist, won the GOP’s nomination for governor. He received 568,000 votes, which was 44.1 percent of the vote in a low turnout primary. One-quarter of Pennsylvania’s nine million registered voters cast ballots.

Keep reading... Show less

Rep. Ted Budd, left, and Cheri Beasley

On Tuesday, North Carolina Republicans selected Rep. Ted Budd (R-NC), a far-right extremist who has pushed false claims about the 2020 election, to be their Senate nominee. He will face Democratic nominee Cheri Beasley, a former chief justice of the state's Supreme Court.

As of Wednesday morning, Budd had received more than 58 percent of the GOP primary vote. Former Gov. Pat McCrory received just below 25 percent of the vote, while former Rep. Mark Walker received about nine percent of the vote.

Keep reading... Show less
{{ }}