But not everyone is as confident. Banc of America Securities analyst Dana Cohen said that while the company has been able to diversify its business into growing markets, reduce nonperforming divisions, and Tiffany Key on sale core assortments, issues remain.With the anticipation of fewer international flight seats available in the second half, tourism will be an issue for Tiffany, according to Cohen. Advantageous currency translation, which has been boosting the retailer's earnings by about 5 percent, will also begin to moderate, she said, as the dollar continues to rally.Pali Capital retail analyst Stacey Widlitz was a bit more optimistic."There's consumer weakness, but the good news for Tiffany is that they're becoming a global brand," she said.Tiffany also had help from a greater concentration of high-end merchandise at higher price points, Widlitz said.Quarterly and first-half gross margin increased to 57.8 and 57.4 percent, respectively, from 56.1 percent in both periods, aided by favorable changes in a geographic and product sales mix, as well as sales leverage on fixed costs. Net inventories at the end of the quarter were up 10.1 percent, due in part to store expansion.First-half profits shot up 53.5 percent to $145.2 million, or $1.13 a diluted share, from $94.5 million, or 86 cents a share, a year ago. Net sales rose 11.3 percent to $1.4 billion from $1.26 billion.Tiffany Money Clip on sale increased its full-year earnings guidance slightly to a range of $2.82 to $2.92 a diluted share, versus its prior forecast of $2.80 to $2.90 a share. The company said this expectation includes worldwide sales growth of approximately 9 percent based on continued strong growth in Europe and Asia-Pacific, and a return to growth in U.S. same-store sales in the fourth quarter due to an easier year-over-year comparison. Full-year operating margin is also expected to increase slightly over last year, according to the company.nalysts are looking for earnings of $2.83 a share on revenues of $3.27 billion.
Tiffany & Co.'s fiscal-first-quarter profit rose 19% as higher demand in Europe and Asia helped make up for soft sales in the U.S.In addition, the New York jeweler raised its full-year earnings outlook while noting it maintains "a cautious outlook for U.S. sales" and doesn't expect an improvement until later this year.Tiffany also said it plans to introduce a "new, smaller store format" in the U.S. later this year, in addition to its plans to open about 24 new stores world-wide.Sales at stores open at least a year rose 21% in Europe and 15% in the Asia-Pacific region, driven by demand in areas from London and Italy to Hong Kong and China. Adjusted for currency effects, same- store sales rose 12% in Europe and 4% in the Asia-Pacific region.Overseas sales helped offset flat sales in the U.S., the company's largest market, where a slowing economy has Tiffany Necklace on sale spending on jewelry and other discretionary items.International shoppers taking advantage of the weak dollar also helped Tiffany's domestic sales. The company's New York flagship store saw a 16% jump in same-store sales, driven by demand from foreign tourists. Meanwhile, sales at branch stores declined 4% as the company experienced soft sales of items below $500.Sales in the quarter ended April 30 have been driven by engagement rings in the U.S., silver jewelry outside of the U.S. or designer collections such as Elsa Peretti jewelry.Chief Executive Michael J. Kowalski said strong sales growth despite "only modest growth in the U.S. due to challenging conditions reflects the benefit of globally diversified distribution."
"Tiffany is becoming a truly global brand," said Pali Research analyst Stacey Widlitz, who has a "buy" rating on the stock. "The strength in international and the size of it is enough to offset however long the U.S. consumer weakness is lasting. International consumers love this brand."World-wide sales so far in May have met the company's expectations, Tiffany said. While U.S. same-store sales for the year are expected to rise, the company said it expects second-quarter U.S. sales to decline, which will pressure profit in that period.Tiffany raised its full-year outlook it boosted in March an Tiffany Note on sale five cents and now expects earnings of $2.80 to $2.90 a share, maintaining its forecast for net sales growth of about 10%. The latest mean estimate of analysts surveyed by Thomson Reuters was for earnings of $2.73 a share on 10% sales growth to $3.23 billion.Tiffany & Co. said fiscal first-quarter profit rose 9.6% as sales increased in the U.S. and abroad. The New York jeweler and specialty retailer reported net income of $35.9 million, or 24 cents a share, for the period ended April 30, compared with $32.7 million, or 22 cents a share, a year earlier. Sales rose 14% to $395.8 million. International retail sales rose 12% to $165.5 million.
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