Tiffany & Co Second Quarter Net Earnings Soar 53%

Tiffany & Co. second quarter net sales increased 11%, while comparable store sales rose 6% in the U.S. and 1% in local currency in Japan. Net earnings during the quarter jumped 53% to $50.551,000 from $33,090,000 last year. Results were boosted by rough diamond sales.

Earnings from operations increased 27% due to the sales growth and its leverage effect on selling, general and administrative expenses.

Net earnings in the six months for the fiscal year rose 30% to $90,609,000 compared with $69,901,000.

The company benefited from the American Jobs Creation Act of 2004, which effectively lowered tax rates in both periods, which boosted earnings by $0.05 per diluted share in the second quarter and $0.06 per diluted share in the first half.

Net sales in the second quarter increased 11% to $526,701,000, compared with $476,597,000. On a constant-exchange-rate basis that excludes currency effects from translating foreign-denominated sales into U.S. dollars,  net sales increased 10% and worldwide comparable store sales increased 4%. 

In the first half, net sales rose 11% to $1.037 billion compared with $933,557,000 in the prior year. On a constant-exchange-rate basis, net sales rose 10% and worldwide comparable store sales rose 4%.

Under the Other category sales increased 43% to $26,533,000 in the second quarter and 52% to $61,330,000 in the first half. These increases were largely due to sales of rough diamonds. The company started selling rough during the third quarter of 2004 and will continue doing so on a regular basis as a component of its direct diamond sourcing initiatives.