Tiffany Guides Higher

The third quarter is boosted by tax and stock-sale gains.
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Tiffany (TIF) - Get Report posted a rise in third-quarter earnings and guided higher for the year.

The New York-based jeweler made $29 million, or 21 cents a share, for the quarter ended Oct. 31, up from the year-ago $24 million, or 16 cents a share. Revenue rose to $548 million from $500 million a year earlier.

The latest quarter included some $7 million in gains tied to stock sales and certain tax-adjustment gains. Tiffany didn't say what the per-share effect was.

Analysts surveyed by Thomson Financial were looking for a 16-cent profit on sales of $544 million.

"We are pleased with these overall results. We are now almost one-month into the November-December holiday period and have seen net sales growth higher than we expected," said CEO Michael Kowalski. "Comparable store sales growth in the U.S. is currently exceeding our high-single-digit expectation and international comp store sales growth is exceeding our mid-single digit expectation. It's a good start to the season, but the vast majority of holiday business is still ahead of us."

On a constant-exchange-rate basis which excludes the effect of translating foreign-currency-denominated sales into U.S. dollars, net sales rose 10% and worldwide comparable store sales rose 4%.

U.S. retail sales increased 9% to $270 million and comparable store sales rose 6% (sales rose 13% in the New York flagship store and 4% in comparable branch stores). Comparable store sales growth was due to higher spending per transaction.

International retail sales rose 9% to $222 million. On a constant-exchange-rate basis, sales increased 9% in the quarter and 14% in the year-to-date, and comparable store sales rose 4% and 10%, respectively, as strong growth in many international markets more than compensated for weaker results in Japan.

The company said it expects to make $1.79 to $1.84 a share for the year, on 10% sales growth and a slight drop in gross margins. The company expects a low double-digit inventory rise.