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Tiffany's shares rose 4.2 percent to $135.15 in premarket
trading after the company said it expected full-year earnings
per share to be between $4.65 and $4.80, up from $4.50-$4.70.
Under Chief Executive Alessandro Bogliolo, Tiffany has been
reaping the benefits of a shift in focus to price-conscious
younger clientele by selling less expensive fashion jewelry and
introducing high-end everyday home items such as $350 gold
straws and $1,500 gold paper clips.
The company also recently unveiled Paper Flowers, its new floral
jewelry collection made of platinum and diamonds.
Net sales in the Americas, which accounts for nearly half of the
company's total sales, rose 8 percent to $475 million. Sales in
Asia Pacific grew 28 percent.
The company traditionally benefits from tourist spending in the
United States with its flagship New York store generating almost
10 percent of annual sales, but it underlined that the gains
this time in both those major regions were driven by spending by
locals.
After years of falling sales, mainly due to intense competition
from online players such as Blue Nile, Tiffany has been
investing significantly to develop its website and boost its
marketing and store presentations.
Despite the additional costs generated by those investments, the
company's gross margins rose to 64 percent from 62.5 percent a
year earlier.
"Tiffany is continuing on its turnaround strategy, posting
strong revenue growth," said Instinet analyst Simeon Siegel.
"The company has been explicit in its intentions to reinvest
into the business, which should be a positive."
Tiffany's same-store sales rose 7 percent excluding the impact
of exchange rate fluctuations, above expectations of an increase
of 5.73 percent, according to Thomson Reuters I/B/E/S.
The company's net earnings rose 26 percent to $144.7 million in
the second quarter ended July 31.
Net sales rose 12.6 percent to $1.08 billion, topping the
average analyst estimate of $1.04 billion.
Excluding one-time items, the company earned $1.17 per share,
while Wall Street had expected $1.01 per share.
(Reporting by Vibhuti Sharma in Bengaluru; Editing by Arun
Koyyur)
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