Luxury jeweler Tiffany
posts surprise rise in quarterly profit
Send a link to a friend
[August 25, 2016]
(Reuters) - Upscale jeweler Tiffany
& Co reported an unexpected rise in second-quarter profit as margins got
a boost from lower product input costs, changes in product sales mix and
The company's shares rose 4.5 percent to $72 in premarket trading on
Tiffany's net income rose to $105.7 million, or 84 cents per share, in
the quarter ended July 31 from $104.9 million, or 81 cents per share, a
Analysts on average had expected profit to drop to $89.8 million, or 72
cents per share, according to Thomson Reuters I/B/E/S.
The company's selling, general and administrative costs fell 4.3 percent
to $402.2 million in the quarter. Gross margin increased to 61.9
percent, from 59.9 percent.
Tiffany's profitability for the rest of the year will likely get a boost
from the recent drop in prices of precious metals such as silver, gold
and platinum, Edward Jones analyst Brian Yarbrough wrote in a
However, Tiffany, known for its 130-year old "Tiffany Setting" diamond
engagement ring, has been struggling with declining sales due to lower
tourist traffic and as a strong dollar erodes the value of revenue from
outside the United States.
Tiffany's sales at stores open for more than a year fell 8 percent in
the latest quarter, dropping for the seventh straight quarter.
Analysts on average were expecting a decline of 6.90 percent, according
to research firm Consensus Metrix.
[to top of second column]
The Tiffany & Co. logo is seen on an awning of their store in
Manhasset, New York, U.S., May 23, 2016. REUTERS/Shannon Stapleton
Tiffany's total net sales fell 5.9 percent to $931.6 million, while analysts
were expecting $934.74 million.
"The global environment continues to reflect well known challenges that we
believe have had broad effects on spending by local customers, as well as
foreign tourists, especially from China," Chief Executive Frederic Cumenal said
in a statement.
The company said sales were lower in continental Europe due to weak demand by
foreign tourists and local customers, in contrast to better performance in the
(Reporting by Subrat Patnaik in Bengaluru; Editing by Don Sebastian and Savio
[© 2016 Thomson Reuters. All rights
Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.