Tiffany’s economics up and downs have been quite indicative of the general outlook of our economy overall. And it’s no surprise, right? If you can afford a diamond anniversary ring for your wife, chances are your pursestrings aren’t as tight!
Here’s the latest:
Tiffany & Co. sounded an optimistic note for the holidays, saying its sales in the retail industry’s most important season are running ahead of target.
The comments from luxury jewelry company come as retailers are gearing up for the frenzy of Black Friday weekend and a holiday season that the National Retail Federation forecasts will be the best in four years.
“We are now a few weeks into the all-important two-month holiday season, and sales growth is exceeding our expectations,” Tiffany Chief Executive Michael Kowalski said.
The comments followed a strong third quarter for the company, which raised its profit forecast for the year. Tiffany’s shares rose to a record high in early trading Wednesday, and the outlook gave a boost to companies like Coach Inc., Nordstrom Inc. and Saks Inc.
The luxury-goods industry has rebounded sharply this year after a disastrous 2008. Coach said in October that it is pleased by its sales trends, and French luxury goods company Hermes International predicted earlier this month that it would have a record year.
Punctuating the rebound, Tiffany said it is seeing the most strength in its higher-end goods. “We continue to see bifurcated performance, with declines in sales and transactions below $500, but double-digit percentage increases in most every other higher priced category,” investor relations chief Mark Aaron said on a conference call with analysts. “This indicates to us diverging effects to one degree or another that the economy is having on consumer spending.”
Tiffany has benefited from higher pricing of late. For the period ended Oct. 31, Tiffany posted a profit of $55.1 million, or 43 cents a share, up from $43.3 million, or 35 cents a share, a year earlier.
Sales jumped 14% to $681.7 million following last year’s 2.9% drop. The company’s gross margin widened to 58.5% from 54.8%, due in part to higher prices.
Sales in the Americas rose 9% and climbed 5% on a same-store basis excluding currency impacts. Internet and catalog sales in the Americas climbed 7%. At Tiffany’s New York flagship store, sales declined 3%. Sales were up 24% and 22% in the Asia-Pacific region and Europe, respectively.
—Matt Jarzemsky contributed to this article.
Source: Wall Street Journal