Tiffany Drops as Second-Quarter Sales Fall Short of Estimates
Tiffany Drops as Second-Quarter Sales Fall Short of Estimate
Daniel Barry/Bloomberg
A customer carries a Tiffany's bag outside of their store in New York.
A customer carries a Tiffany's bag outside of their store in New York. Photographer: Daniel Barry/Bloomberg
Tiffany & Co., the world’s second- largest luxury jewelry retailer, dropped in New York trading after second-quarter sales trailed analysts’ projections.
Tiffany said today that revenue rose to $668.8 million in the quarter ended July 31, missing the $690.8 million average of estimates compiled by Bloomberg. The jeweler saw “pronounced softness” in Southern California, Las Vegas and Arizona, Vice President Mark Aaron said on a conference call.
Sales in the Americas make up more than half of the total at Tiffany’s, which operates more than 220 stores worldwide. Revenue overseas increased, led by a 21 percent jump in Asia, propelling the jeweler to a 19 percent profit gain.
“I’m mystified by the investor reaction because we saw a pretty solid quarter delivered here,” said Matt Arnold, equity analyst at Edward Jones & Co. in St. Louis, who has a “buy” rating on the shares. “Apparently there are short-term-oriented investors out there who are dumping it on the sales number instead of focusing on the strong growth in Asia.”
The New York-based company also raised its full-year earnings goal to as much as $2.65 a share. In May, Tiffany forecast profit of $2.55 to $2.60, an increase from the March projection. Analysts estimated $2.59, on average.
Chief Executive Officer Michael Kowalski plans to introduce a line of handbags next month, including a $17,500 glazed crocodile satchel, to extend Tiffany’s brand beyond jewelry. The collection, which includes purses, card cases and wallets, has jewelry-inspired touches, such as handbag straps designed to look like bracelets.
Tiffany fell $1.33, or 3.2 percent, to $40.71 at 4 p.m. in New York Stock Exchange composite trading. The shares have dropped 5.3 percent this year.
Net income rose 19 percent to $67.7 million, or 53 cents a share. Excluding some items, profit was 55 cents. Analysts on average predicted 52 cents, according to a Bloomberg survey.
Profit was $56.8 million, or 46 cents a share, in the same quarter a year earlier.
To contact the reporter on this story: Alex Sherman in New York at asherman6@bloomberg.net
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