Tiffany Advances After Raising Full-Year Profit Forecast on Sales in Asia

Tiffany & Co. (TIF), the world’s second- largest luxury jewelry retailer, rose the most in two years after raising its full-year earnings forecast, helped by price increases and sales in the Asia-Pacific region.

Tiffany jumped $5.90, or 9.4 percent, to $69.01 at 4 p.m. in New York Stock Exchange composite trading, the largest gain since Aug. 28, 2009. The stock has gained 11 percent this year.

Profit in the year ending Jan. 2012 will be as much as $3.75 a share, up from a previous forecast of a maximum of $3.55, New York-based Tiffany said today in a statement. Analysts had projected $3.56, the average of 21 estimates.

Tiffany said customers accepted price increases implemented to offset higher costs for precious metals and gemstones. Stock market volatility hasn’t hurt sales, as revenue in the current quarter is exceeding estimates, Chief Financial Officer Patrick McGuiness said on a conference call today.

“When you have a brand as powerful as Tiffany and they execute, this is what you get,” David Schick, an analyst at Stifel Nicolaus & Co. in Baltimore, said today in a telephone interview. “They are clearly taking share and executing well.” He has a “hold” rating on the shares.

Global Sales

Full-year global sales will increase at a high-teens percentage rate, with at least a 30 percent rise in the Asia- Pacific region and 20 percent in Europe, Chief Executive Officer Michael Kowalski said.

Net income in the three months ended July 31 climbed 33 percent to $90 million, or 69 cents a share, from $67.7 million, or 53 cents, a year earlier, Tiffany said. Excluding staff relocation costs, profit was 86 cents, topping the 71-cent average of 17 analysts’ estimates compiled by Bloomberg.

Second-quarter sales rose 31 percent to $872.7 million, exceeding the $784 million average of 14 analysts’ estimates. Revenue from stores open at least a year, a key measure of a retailer’s growth because new and closed stores are excluded, surged 22 percent.

The company operated 236 stores worldwide as of July 31.

Cie. Financiere Richemont SA is the world’s largest luxury jewelry maker.

To contact the reporters on this story: Cotten Timberlake in Washington at ctimberlake@bloomberg.net; Matt Townsend in New York at mtownsend9@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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