Tiffany Q4 Profits Soar Due to Aber Stake Sale

Luxury jeweler Tiffany & Co. today (Monday) reported an 11 percent rise in sales for the fourth quarter ending January 31 with net earnings soaring 96 percent – boosted by Tiffany's sale of its stake in Aber Diamond Corp.

 

Net sales for the quarter jumped to $810.1 million from $731.6 million a year earlier, while worldwide comparable store sales rose 5 percent. For the year, net sales rose 10 percent to $2.2 billion and worldwide comparable store sales rose 7 percent.

Net earnings in the fourth quarter increased 96 percent to $217.0 million from $110.5 million.

As a result of the sale of its eight million Aber shares for $268 million in early December, Tiffany's fourth quarter and fiscal year earnings included a pre-tax gain of $193.6 million.

Chairman and CEO Michael J. Kowalski was far from happy with the financial results, saying the firm's operating performance in 2004 had not met the targets management set at the beginning of the year. 

“Although we achieved strong comparable store and total sales growth in the U.S. and certain international markets, we did not achieve the sales results we were looking for in Japan,” Kowalski said.

“Earnings in 2004 were significantly affected by a decline in gross margin caused by sharply higher costs for precious metals and diamonds, as well as by the geographic and product sales mix.”