Tiffany & Company (TIF) has posted stronger-than-expected second-quarter 2010 results buoyed by improved demand for luxury items worldwide. The quarterly earnings of 55 cents a share surpassed the Zacks Consensus Estimate of 53 cents, and rose 41% from 39 cents earned in the prior-year quarter.
On a reported basis, including one-time items, quarterly earnings came in at 53 cents a share, up 15% from 46 cents delivered in the year-ago quarter.
Tiffany, a high-end jewelry designer, manufacturer and retailer, remains optimistic about fiscal 2010, and forecasts earnings in the range of $2.60 to $2.65 per share, up from its previous guidance range of $2.55 to $2.60. The current Zacks Consensus Estimate for fiscal 2010 is $2.58.
The company posted net sales of $668.8 million during the quarter, up 9% from the prior-year quarter, signaling the renewed demand for jewelry in the Americas, Asia-Pacific, Japan and European regions. However, quarterly sales fell short of the Zacks Consensus Revenue Estimate of $692 million. Comparable-store sales climbed 6% in the quarter under review. In constant currencies net sales jumped 8% and comps grew 5% during the second quarter.
Management hinted that third-quarter 2010 net sales are increasing at a low double-digit percentage rate. Tiffany now anticipates total net sales for fiscal 2010 to rise by 11%.
The jewelry market was hit hard by the recent global meltdown, which triggered a shift in focus to cheaper private label brands. But as the recession eased, demand for luxury items also improved.
Tiffany is well positioned to deliver robust sales and earnings growth. The company holds a significant position in the world jewelry market and is poised to benefit from its increased geographic reach.
By geographic segment, sales in the Americas grew 8% to $350.4 million, whereas comps rose 6% during the quarter; sales in the Asia-Pacific region surged 21% to $111.5 million and comps increased 10%; and sales in Europe climbed 14% to $76.9 million and comps rose by 11%. Sales in Japan advanced 4% to $118 million, but comps dropped marginally by 1%. Other sales tumbled 19% to $11.9 million, reflecting decline in wholesale sales of rough diamonds.
For fiscal year 2010, management now expects a mid-20s percentage increase in sales in the Asia-Pacific region, mid-teens percentage growth in Europe, a 10% rise in the Americas but a low-single digit percentage decline in Japan. Other sales are expected to increase moderately compared with the previous year.
With signs of improvement in the retail environment, Tiffany now plans to open 14 stores (2 in Europe, 5 in the Americas and 7 in Asia-Pacific) in fiscal 2010. The company currently operates 223 stores.
Tiffany repurchased 798,900 shares at $41.16 per share, aggregating $32.9 million. The company still has $355 million at its disposal under the existing authorization, which expires in January 2011.
The company ended the quarter with cash and cash equivalents of $614.7 million, and total short-term and long-term debt of $782 million, reflecting 40% of shareholders’ equity compared with 45% in the prior-year quarter.
Currently we have a Neutral rating on the stock. Moreover, the Zacks #3 Rank, which translates into a short-term ‘Hold’ recommendation, correlates with our long-term view.
TIFFANY & CO (TIF): Free Stock Analysis Report
Zacks Investment Research
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Tiffany, a high-end jewelry designer, manufacturer and retailer, remains optimistic about fiscal 2010, and forecasts earnings in the range of $2.60 to $2.65 per share, up from its previous guidance range of $2.55 to $2.60. The current Zacks Consensus Estimate for fiscal 2010 is $2.58.
The company posted net sales of $668.8 million during the quarter, up 9% from the prior-year quarter, signaling the renewed demand for jewelry in the Americas, Asia-Pacific, Japan and European regions. However, quarterly sales fell short of the Zacks Consensus Revenue Estimate of $692 million. Comparable-store sales climbed 6% in the quarter under review. In constant currencies net sales jumped 8% and comps grew 5% during the second quarter.
Management hinted that third-quarter 2010 net sales are increasing at a low double-digit percentage rate. Tiffany now anticipates total net sales for fiscal 2010 to rise by 11%.
The jewelry market was hit hard by the recent global meltdown, which triggered a shift in focus to cheaper private label brands. But as the recession eased, demand for luxury items also improved.
Tiffany is well positioned to deliver robust sales and earnings growth. The company holds a significant position in the world jewelry market and is poised to benefit from its increased geographic reach.
By geographic segment, sales in the Americas grew 8% to $350.4 million, whereas comps rose 6% during the quarter; sales in the Asia-Pacific region surged 21% to $111.5 million and comps increased 10%; and sales in Europe climbed 14% to $76.9 million and comps rose by 11%. Sales in Japan advanced 4% to $118 million, but comps dropped marginally by 1%. Other sales tumbled 19% to $11.9 million, reflecting decline in wholesale sales of rough diamonds.
For fiscal year 2010, management now expects a mid-20s percentage increase in sales in the Asia-Pacific region, mid-teens percentage growth in Europe, a 10% rise in the Americas but a low-single digit percentage decline in Japan. Other sales are expected to increase moderately compared with the previous year.
With signs of improvement in the retail environment, Tiffany now plans to open 14 stores (2 in Europe, 5 in the Americas and 7 in Asia-Pacific) in fiscal 2010. The company currently operates 223 stores.
Tiffany repurchased 798,900 shares at $41.16 per share, aggregating $32.9 million. The company still has $355 million at its disposal under the existing authorization, which expires in January 2011.
The company ended the quarter with cash and cash equivalents of $614.7 million, and total short-term and long-term debt of $782 million, reflecting 40% of shareholders’ equity compared with 45% in the prior-year quarter.
Currently we have a Neutral rating on the stock. Moreover, the Zacks #3 Rank, which translates into a short-term ‘Hold’ recommendation, correlates with our long-term view.
TIFFANY & CO (TIF): Free Stock Analysis Report
Zacks Investment Research
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