Tiffany Jumps After Annual Profit Forecast Exceeds Estimates

March 20 (Bloomberg) -- The world's second-largest luxury jewelry retailer reported Q4 profits of $1.39 a share, three cents shy of analyst estimates. Bloomberg's Erik Schatzker, Scarlet Fu and Stephanie Ruhle report on Bloomberg Television's "Inside Track." (Source: Bloomberg)

Tiffany & Co. (TIF), the world’s second- largest luxury jewelry retailer, rose the most in more than six months after forecasting annual profit that beat analysts’ estimates, driven by sales growth in the Americas and Asia.

Tiffany advanced 6.7 percent to $73.27 at the close in New York, for the biggest gain since Aug. 26. The shares increased 11 percent this year.

Profit excluding some items will advance to as much as $4.05 a share in the year ending Jan. 31, 2013, the New York- based company said today in a statement. Analysts projected $3.92, the average of 22 estimates compiled by Bloomberg.

Tiffany is benefiting from stock-market gains that have prompted luxury consumers to resume jewelry purchases, a turnabout from January, when the retailer said weak spending from U.S. customers had slowed holiday sales. New designs, such as Paloma Picasso’s Venezia collection introduced in the fall, helped boost fourth-quarter sales 7.8 percent to $1.19 billion.

“Their guidance suggests that business has reaccelerated,” David Schick, an analyst with Stifel Nicolaus & Co. in Baltimore, said today in an interview. “When the financial markets, economic conditions and consumer sentiment improve, people go shopping.”

The company projected annual sales growth of about 10 percent and said most earnings gains will occur in the latter part of 2012. Tiffany plans to add 24 stores this year, including 9 in the Americas and 7 in the Asia-Pacific region. As of Jan. 31, the company operated 247 stores worldwide.

“While it is obviously still quite early in this new fiscal year, we are pleased that worldwide sales growth is tracking in line with our internal expectations,” Chief Executive Officer Michael Kowalski said.

Higher Product Costs

Tiffany said profit in the fourth quarter was hampered by higher product costs and expenses to relocate its New York headquarters.

Fourth-quarter net income fell 1.6 percent to $178.4 million, or $1.39 a share, from $181.2 million, or $1.41, a year earlier, Tiffany said. Analysts projected $1.42, the average of 17 estimates compiled by Bloomberg.

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

To contact the reporter on this story: Cotten Timberlake in Washington at ctimberlake@bloomberg.net;

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

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