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Tiffany posts flat 4th-qtr net income, but beats Wall Street predictions

By: Anne D'Innocenzio, The Associated Press

Posted: 03/22/2013 6:38 AM | Comments: 0 | Last Modified: 03/22/2013 4:54 PM

FILE - In this Nov. 7, 2008 file photo, shoppers look in through a window at Tiffany & Co.'s new store at Easton Town Center in Columbus, Ohio. Jewelry retailer Tiffany & Co. said Friday, March 22, 2013, its fourth-quarter net income edged up less than 1 percent, but managed to beat Wall Street predictions. (AP Photo/Kiichiro Sato, File)

NEW YORK, N.Y. - Tiffany says its fourth-quarter net income edged up less than 1 per cent, but still beat Wall Street predictions as strong customer demand in Asia for its pricey baubles offset weakness in the U.S.

The upscale jewelry company also offered an annual sales outlook that topped analysts' estimates, and its shares rose nearly 2 per cent Friday.

The results, which include the critical holiday season, show Tiffany's resilience even as it faces challenges in the U.S. and a fiscal crisis in Europe.

For the quarter ended Jan. 31, Tiffany earned $179.6 million, or $1.40 per share. Revenue rose 4 per cent to $1.24 billion.

Analysts polled by FactSet expected earnings of $1.36 per share on $1.25 billion in revenue.

"While financial results in fiscal 2012 were disappointing due to lower-than expected sales growth and pressures on gross margin, we continued to maintain a longer term focus on strengthening global awareness of the Tiffany & Co. brand," Michael J. Kowalski, Tiffany's chairman and chief executive officer, said in a statement.

Total sales in the Americas region increased 2 per cent to $620 million in the fourth quarter and 2 per cent to $1.8 billion in the full year. The area represents 48 per cent of last year's global revenue. Revenue at stores open at least a year declined 2 per cent in both the quarter and full year on a constant exchange rate basis. Sales in the New York flagship store dropped 3 per cent in both the quarter and full year, while that figure dropped 2 per cent for its branch locations for both periods.

In the Asia-Pacific region, total sales rose 13 per cent to $254 million in the fourth quarter and 8 per cent to $810 million in the full year. The region represents 21 per cent of worldwide sales. On a constant exchange rate basis, total sales rose 10 per cent in the fourth quarter due to sales growth in Greater China and in other markets and rose 8 per cent in the full year. On that basis, revenue at stores opened at least a year rose 6 per cent in the quarter and 2 per cent for the full year.

Total sales in Japan declined 6 per cent to $192 million in the fourth-quarter, reflecting a weaker Japanese yen versus the U.S. dollar and increased 4 per cent to $639 million or 17 per cent of worldwide sales in the full year. However, on a constant exchange rate basis, total sales rose 2 per cent in the quarter and 6 per cent in the full year. On that basis, revenue at stores opened at least a year rose 2 per cent and 7 per cent in the quarter and full year respectively.

In Europe, total sales rose 3 per cent to $146 million in the fourth quarter due to mixed performance by country and also rose 3 per cent to $432 million or 11 per cent of worldwide sales in the full year. On a constant exchange rate basis, total sales rose 3 per cent and 7 per cent in the quarter and full year respectively. Revenue at stores opened at least year were unchanged in the quarter and rose 2 per cent in the full year.

The New York-based jewelry company also says it expects its first-quarter earnings from operations will fall about 15 per cent to 20 per cent as a result of profitability pressures and higher marketing costs, but pick up later in the year.

For the current year, Tiffany expects sales growth of 6 per cent to 8 per cent, which means that sales are expected to be anywhere from $4.02 billion to $4.09 billion. Analysts project $4.02 billion

It expects full-year earnings of $3.43 per share to $3.53 per share. Analysts expect $3.46 per share.

Tiffany shares rose $1.32, or 1.9 per cent, to close at $69.23 Friday.

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