Global growth leads to jeweller upping full-year earnings forecast.
Tiffany presented “better than expected” third quarter results with sales in Europe up 19% as the jewellery company increased its full-year earnings forecast.
In Europe, sales net rose 19% to US$92.5 million (£59.3m) in the third quarter and 25% to $279.5 million in the year to date. On a constant-exchange-rate basis, total sales and comparable store sales rose 15% and 6% in the third quarter due to sales growth in continental Europe, and increased 17% and 10% in the year to date.
The jewellery company is planning to open three more stores in Europe by the end of January.
The successes in Europe were replicated elsewhere across the globe with Tiffany’s worldwide net sales up 21% to US$821.8 million (£526.6m). On a constant-exchange-rate basis excluding the effect of translating foreign-currency-denominated sales into US dollars, worldwide net sales increased 17% and comparable store sales increased 16%.
Tiffany chairman and chief executive Michael Kowalski said: "Increased sales in all regions contributed to the continuation of strong worldwide sales growth in the third quarter. We were also pleased to achieve an improved operating margin by leveraging the sales growth against fixed costs.
Despite the buoyant results, Kowalski said he remains cautious about the future and admitted to recent weakening in sales in Europe and the US, although these remain in line with expectations.
He said: “We are, of course, mindful of continued short-term economic challenges and uncertainties in some markets. Worldwide sales-to-date at this relatively early stage of our November-December holiday season are tracking in-line with our current expectations despite recent sales weaknesses in Europe and in the eastern part of the US. We are slightly increasing our full-year earnings forecast to $3.70 to $3.80 per diluted share (not including $0.20 per diluted share of nonrecurring expenses) to reflect a portion of the better-than-expected third quarter results."
Tiffany said that it expects sales to increase by 20% in Europe for the full-year ending January 31, and a high-teens percentage uptake in worldwide sales.