Tiffany & Co. (NYSE:TIF) today reported an increase in net earnings in its second quarter ended July 31, 2013 reflecting sales growth and an improved operating margin. As a result of better-than-expected earnings in the quarter, management increased its full year forecast.
In the three months (“second quarter”) ended July 31, 2013:
- Worldwide net sales rose 4% to $926 million. 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 rose 8%, and comparable store sales rose 5% due to growth in most regions.
- Net earnings increased 16% to $107 million, or $0.83 per diluted share, compared with $92 million and $0.72 per diluted share in the prior year.
In the six months (“first half”) ended July 31, 2013:
- Worldwide net sales increased 7% to $1.8 billion. On a constant-exchange-rate basis, sales rose 10% with comparable store sales increasing 7%.
- Net earnings rose 10% to $190 million, or $1.48 per diluted share, from $173 million, or $1.36 per diluted share, in the prior year. Expenses of $9 million, or $0.05 per diluted share, had been recorded in this year’s first quarter for staff and occupancy reductions; excluding those costs, net earnings in the first half rose 13% to $196 million, or $1.53 per diluted share (see “Non-GAAP Measures” schedule).
Michael J. Kowalski, chairman and chief executive officer, said, “Total sales growth met our objective due to solid performance in most regions, and with particular strength in our statement and fine jewelry product categories. We were pleased with the results of our efforts to improve gross margin which, combined with well-controlled expenses, yielded a solid increase in operating margin.”