This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Tiffany Reports Its Second Quarter Results

Stocks in this article: TIF

Net sales highlights were as follows:

  • In the Americas region, total sales increased 2% to $444 million in the second quarter and 4% to $852 million in the first half. On a constant-exchange-rate basis, total sales also rose 2% and 4% in the respective periods; comparable store sales were unchanged in the quarter and rose 1% in the half, led by growth in Tiffany’s New York flagship store sales.
  • Total sales in the Asia-Pacific region rose 20% to $208 million in the second quarter and 17% to $432 million in the first half. On a constant-exchange-rate basis, total sales also rose 20% and 17%, and comparable store sales increased 13% and 11% in the respective periods, led by especially strong sales growth in Greater China.
  • Business in Japan continued to be strong in the second quarter. The negative translation effect from a substantially weaker yen caused total sales to decline 14% to $136 million in the second quarter and 7% to $281 million in the first half. However, on a constant-exchange-rate basis, total sales increased 7% in the second quarter and 14% in the first half, due to comparable store sales growth of 8% and 14% with strong growth in engagement and higher-end jewelry categories.
  • Total sales in Europe rose 11% to $111 million in the second quarter and 9% to $204 million in the first half. On a constant-exchange-rate basis, total sales rose 10% and 9% in the respective periods and comparable store sales rose 7% and 6% due to sales growth in the United Kingdom and most of continental Europe.
  • Other sales increased 33% to $26 million in the second quarter and 87% to $53 million in the first half, primarily reflecting the conversion in July 2012 of five TIFFANY & CO. stores in the United Arab Emirates from independently-operated to Company-operated.
  • Tiffany opened three stores in the second quarter: in Hong Kong, in Verona, Italy and in Villahermosa, Mexico, and closed one in Tokyo, Japan. At July 31, 2013, the Company operated 277 stores (116 in the Americas, 67 in Asia-Pacific, 54 in Japan, 35 in Europe and five in the U.A.E.), versus 260 stores (106 in the Americas, 61 in Asia-Pacific, 55 in Japan and 33 in Europe and five in the U.A.E.) a year ago.

Other financial highlights:

  • Gross margin (gross profit as a percentage of net sales) increased to 57.5% in the second quarter from 56.3% a year ago, and gross margin was unchanged at 56.8% in the first half. During the second quarter and first half, gross margin increasingly benefitted from diminishing product cost pressure and price increases taken earlier in the year. A shift in sales mix toward higher-priced, lower gross margin products continued to impact gross margin.
  • SG&A (selling, general and administrative) expenses increased 3% in the second quarter and 6% in the first half. The growth in both periods was due to store-related costs and higher marketing spending, but was partly mitigated by the translation effect from a stronger U.S. dollar. In addition, $9 million of expenses had been recorded in the first quarter tied to specific cost reduction initiatives related to staffing reductions, as well as subleasing of office space (see “Non-GAAP Measures” schedule).
  • Other expenses, net of $15 million in the second quarter were up from $14 million last year, and were $27 million in the first half versus $25 million last year.
  • Effective income tax rates were 34.2% in the second quarter and 34.5% in the first half, compared with 34.6% and 34.5% in last year’s respective periods.
  • Cash and cash equivalents were $490 million at July 31, 2013, versus $366 million a year ago. Total short-term and long-term debt of $964 million at July 31, 2013 represented 35% of stockholders’ equity, compared with $940 million and 39% a year ago.
  • Net inventories of $2.3 billion at July 31, 2013, were 4% higher than a year ago. Finished goods inventories rose to support new stores and expanded product assortments, while combined raw material and work-in-process inventories declined slightly from last year. Net inventories rose 7% on a constant-exchange-rate basis.

Mr. Kowalski added, “We are pleased to have achieved healthy earnings growth in the first half of the year. Looking forward, we are equally excited about the initiatives we are pursuing in product development, marketing communications and store expansion, all intended to further enhance Tiffany’s strong brand position and take fuller advantage of its long-term growth opportunities in the global luxury market.”

2 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs