Tiffany & Company (TIF - Analyst Report) announced that worldwide net sales during the holiday period (two-months ended Dec 31st) rose 4% to $1.03 billion, buoyed by healthy performance of its stores in the Americas, Asia-Pacific and Europe. In constant currencies, net sales increased 8%, whereas comparable-store sales climbed 6%.
By geographic segment, sales in the Americas grew 6% to $550 million, while comps rose 7%; sales in the Asia-Pacific region climbed 5% to $196 million, while comps dropped 3%; sales in Japan declined 12% to $135 million and comps dipped 11%; and sales in Europe jumped 11% to $131 million and comps increased 6%. Other sales surged 22% to $21 million.
In constant currencies, sales in the Americas rose 7%, whereas comps grew by an equivalent rate; sales in the Asia-Pacific region grew 8%, whereas comps remained unchanged; sales in Japan advanced 9%, while comps grew 10%; and sales in Europe climbed 8%, whereas comps rose 3%.
Given the sales results and related margins, management reiterated its fiscal-2013 earnings outlook of $3.65 to $3.75 per share, forecasted earlier in November. As of Dec 31, 2013, this designer, manufacturer and retailer of fine jewelry operated 286 stores (121 in the Americas, 69 in Asia-Pacific, 54 in Japan, 37 in Europe and 5 in the U.A.E.).
We believe this Zacks Rank #1 (Strong Buy) stock is well poised to support sales and earnings growth in the long run by leveraging capital investments made over the past several years in distribution, manufacturing and diamond sourcing processes. Tiffany’s long-term growth prospects remain encouraging given its new product launches and focus on enhancing its geographic reach through store expansion program. It remains committed to achieve long-term objectives of at least 15% earnings growth and a 10% to 12% sales increase.
The holiday season was a tough one, while some made their way out, others struggled to lure budget-constrained consumers and trimmed their forecast due to lower-than-expected sales and margin pressure.
Retailers that lowered their guidance battered by the holiday results include Family Dollar Stores Inc. (FDO - Analyst Report), American Eagle Outfitters Inc. (AEO - Analyst Report) and L Brands Inc. (LB - Analyst Report).
Family Dollar, the self-service retail discount store chain, now projects fiscal-2014 earnings between $3.25 and $3.55 per share, down from $3.80 to $4.15 forecasted earlier. L Brands, the specialty retailer of women’s intimate and other apparel, now anticipates fourth-quarter fiscal 2013 earnings to be approximately $1.60 per share compared to its earlier forecast of $1.67 to $1.82.
Apparel and accessories retailer, American Eagle, now expects its fourth-quarter fiscal 2013 earnings to dovetail with the lower-end of previously provided guidance range of 26 cents to 30 cents a share.
Consumer spending environment was not very convincing, and bargain hunters went from one shop to another to grab the best deal.