Tiffany Rises as Domestic Growth Makes Up for Global Slump

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Tiffany & Co., the world’s second-largest luxury jewelry retailer, rose 2.5 percent after higher-than-projected sales in the Americas helped make up for a slowdown in Asia last quarter.

Same-store sales increased 11 percent in the Americas in the third quarter, the New York-based company said in a statement today. That topped the 6.1 percent predicted by analysts, according to Consensus Metrix. The sales declined 3 percent in the Asia-Pacific region and 6 percent in Japan, where a new consumption tax hampered orders.

Chief Executive Officer Michael Kowalski is increasing marketing and pushing deeper into fashion jewelry with the Tiffany T collection, which debuted last quarter. Those moves have resonated in the U.S., where the economy is outpacing much of the world. Tiffany also is raising prices, helping pad its profit margins.

“A lot of people see the Americas region as the biggest opportunity for profit growth,” said Brian Yarbrough, a St. Louis-based analyst at Edward Jones. “The new marketing, the new product designs in the fashion jewelry seem to really be taking hold.”

The shares climbed to $107.60 at the close of trading in New York. Tiffany, which ranks second to Cie. Financiere Richemont SA in global sales of luxury jewelry, has climbed 16 percent so far this yea.

Net Income

A one-time loss from repaying debt dragged down net income in the third quarter, which ended Oct. 31. It tumbled 60 percent to $38.3 million, or 29 cents a share, from $94.6 million, or 73 cents, a year earlier. Excluding the loss, earnings amounted to 76 cents, just below the 77 cents projected by analysts.

Tiffany maintained its profit forecast of $4.20 to $4.30 a share for the full year. Still, it scaled back its sales projection, calling for an increase in the mid- to high-single digits. The company had previously said the growth would be in the high-single digits.

Kowalski is scheduled to step down as CEO next year, though he’ll remain on the board as nonexecutive chairman. President Frederic Cumenal will take over the top job on April 1, the company said earlier this year.

Tiffany’s fashion category is focused on jewelry without gemstones. While the new T collection is offered in a range of materials, most are made of gold. Prices run from a few hundred dollars to $20,000. Unlike traditional jewelery, which is frequently purchased by men for their wives or girlfriends, the T collection is designed for women to buy it for themselves.

“We’re delighted with the initial response to our new Tiffany T collection targeted to the style-conscious female self-purchase customer,” Mark Aaron, a spokesman for the company, said on a conference call.