Sales across Europe rose 9% year-on-year to $101m (£59.85m).
Tiffany & Co. has released its Q1 report for the three months ended April 30 2014, citing a 50% growth in net earnings, with sales across Europe rising 9% to $101 million (£59.8m) and worldwide net sales increasing 13%.
Worldwide net sales rose 13% to $1bn (£592.62m) in Q1 (on a constant-exchange-rate basis that excludes the effect of translating foreign-currency-denominated sales into US dollars, worldwide net sales rose 15%) and store sales rose 11% year-on-year due to growth in most regions.
Net earnings increased 50% to $126m (£74m), or $0.97 (£0.57) per diluted share, compared to $84m (£49m) or $0.65 (£0.39) per share in Q1 2013.
In Europe, total sales rose 9% to $101m (£59.85m). On a constant-exchange-rate basis, total sales rose 2% and comparable store sales declined 3%. Fiscal trends are stated as being similar in the UK as in continental Europe.
In the Americas, total sales increased 8% to $439m (£260m) with Japan also seeing significant growth of 20% to $174m (£103m) (on a constant-exchange-rate basis eliminating the negative effect of a weaker yen versus the US dollar, total sales and comparable store sales rose 29% and 30%). Greater China and Australia achieved noteworthy growth within the Asia Pacific region, with total sales rising 17% to $261m (£154m).
Overall, gross margin was 58.2% in the first quarter compared to 56.2% in Q1 2013, reflective of favourable product costs and price increases across all merchandise categories.
Selling, general and administrative expenses (SG&A) increased 5% largely due to higher store-related costs and labour charges.
Tiffany experienced exceptionally strong customer demand in March, which has been directly linked to Japanese customers’ squeezing in shopping prior to the increase in the nations consumption tax which took effect on April 1.
Other sales increased by 39% to $37m (£21.9m), something which has been accredited to store sales growth in the United Arab Emirates and the opening of the first company-operated Tiffany & Co. store in Russia.
Tiffany opened four stores in the first quarter, including a major store on the Champs Elysees in Paris. As of April 30 2014, the company operates 292 stores (121 in the Americas, 72 in Asia-Pacific, 55 in Japan, 38 in Europe, five in the U.A.E. and one in Russia), versus 275 stores (115 in the Americas, 66 in Asia-Pacific, 55 in Japan, 34 in Europe and five in the U.A.E.) one year ago.
Chairman and chief executive officer, Michael J. Kowalski, said, "This is an excellent and encouraging start to the year. We were pleased with the strong and broad-based sales growth across most regions and product categories and our ability to leverage those improved sales into very significant growth in operating and net earnings. Strength in fine and statement jewelry sales continued, while sales of our new or expanded jewelry collections accelerated, led by our ATLAS collection."
In March 2014, the Company’s board of directors approved a new share repurchase program for up to $300m (£177m) of the company’s common stock over a three year period which expires in March 2017. The Company spent approximately $7m (£4m) in the first quarter to repurchase 82,000 shares at an average cost of $86.95 (£51) per share. $293m (£173m) remains available for future repurchases.
For the rest of 2014 and the start of 2015, net sales are expected to increase with the company opening a further 13 owned-and-operated stores and closing four existing stores. Additionally, Tiffany’s management has increased its earnings forecast for the current fiscal year as a result of this Q1 analysis.