Tiffany & Co. (NYSE: TIF) today reported that in its second quarter the Company earned $92 million, or $0.72 per diluted share, on worldwide net sales of $887 million. Results were in-line with management’s expectations.
In the three months (“second quarter”) ended July 31, 2012:
- Worldwide net sales of $887 million were 2% above the prior year. On a constant-exchange-rate basis that excludes the effect of translating foreign-currency-denominated sales into U.S. dollars (see “Non-GAAP Measures” schedule), worldwide net sales increased 3% and comparable store sales declined 1%.
- Net earnings rose 2% to $92 million, or $0.72 per diluted share, versus $90 million, or $0.69 per diluted share, in 2011’s second quarter.
- Net earnings in the second quarter of 2011 had been reduced by $21 million, or $0.16 per diluted share, for nonrecurring items related to the relocation of Tiffany’s New York headquarters staff (see “Non-GAAP Measures” schedule). Excluding those costs, net earnings in the second quarter declined 17% from 2011’s second quarter.
In the six months (“first half”) ended July 31, 2012:
- Worldwide net sales increased 4% to $1.7 billion. On a constant-exchange-rate basis, worldwide net sales and comparable store sales rose 5% and 1% respectively.
- Net earnings increased 1% to $173 million, or $1.36 per diluted share, from $171 million, or $1.32 per diluted share, a year ago.
- Net earnings in the first half of 2011 had been reduced by $26 million, or $0.20 per diluted share, for nonrecurring items related to the headquarters staff relocation. Excluding those costs, net earnings in the first half were 12% below the prior year.
Michael J. Kowalski, chairman and chief executive officer, said, “These second quarter results met the expectations contained in our previously-reported financial guidance. Not surprisingly, sales growth has been affected by economic weakness in a number of markets and by a very challenging prior-year comparison to a 30% increase in worldwide net sales. We also anticipated the reduced operating margin in the quarter, adjusted for nonrecurring items, due to continued, but moderating, high product input costs and a lack of sales leverage on fixed costs. The resulting decline in net earnings, when compared with last year’s earnings excluding nonrecurring costs, was in line with our expectations and was on top of a 58% increase in last year’s second quarter.”