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Tiffany quarterly profit beats view; hikes outlook
2008-05-30
U.S. jeweler Tiffany & Co (TIF.N) reported a quarterly profit on Friday that surpassed expectations, boosted by strong sales in international markets, and raised its outlook for the full year. While the company expects worldwide sales, other than in Japan, to remain strong, it maintained a cautious stand on U.S. sales, which Chief Executive Michael Kowalski does not expect to improve until later this year. Net profit came to $64.4 million, or 50 cents a share, in the quarter ended April 30 compared with $54.1 million, or 39 cents a share, in the year-earlier period. Analysts on average expected 41 cents a share, according to Reuters Estimates. Overall sales rose 12 percent to $668.1 million in the quarter. On a constant currency basis, which excludes the effect of converting sales in foreign currency to U.S. dollars, sales were up 8 percent. Sales were up 10 percent on the Asia-Pacific region and 30 percent in Europe, both on a constant currency basis, pushing modest domestic sales growth to the backseat. While Tiffany, like more mid-tier rivals such as Zale Corp (ZLC.N) and Finlay Enterprises (FNLY.O), has also gone through a rough patch due to the weak U.S. economy, the jeweler said earlier in May that the year had gotten off to a "promising start." U.S. shoppers have cut back on items like jewelry and furniture, as they spend carefully and largely on necessities with rising prices such as food and gasoline. The company raised its full-year earnings forecast to a range of $2.80 to $2.90 a share. It had previously expected to earn $2.75 to $2.85 a share. Tiffany, which has its flagship store on Fifth Avenue in Manhattan, stood by its sales outlook, which calls for 10 percent growth in the year. (Reporting by Aarthi Sivaraman; Editing by Mark Porter and Derek Caney)
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