Tiffany Q2 Net Sales $575 Million

Tiffany & Co. net sales increased 9 percent to $574.94 million, driven by increases in U.S. and international comparable store sales. As expected, net earnings declined, primarily due to a prior-year tax benefit.

On a constant-exchange-rate basis, net sales increased 10 percent and worldwide comparable store sales rose 6 percent. 

Net earnings decreased to $41.144 million from $50.551 million in the second quarter of 2005. Earnings in the prior year included a tax benefit of $6.6 million, related to the repatriation provisions of the American Jobs Creation Act of 2004.

U.S. Retail sales increased 8% to $288.56 million in the quarter. Comparable store sales increased 5 percent but declined in July (quarterly sales rose 5 percent in the New York flagship store and 4 percent in branch stores.

The luxury retailer says the growth in U.S. comparable store sales resulted from higher spending per transaction.

International retail sales increased 10 percent to $223.15 million. On a constant-exchange-rate basis, sales rose 12% due to 6% total retail sales growth in Japan and solid growth in most other countries.

Direct marketing sales increased 18% to $35.74 million in the second quarter due to growth in the number of orders and in the average amount spent per order.

“Our expectation for the full year calls for a low-double-digit increase in earnings before income taxes for 2006 and net earnings in a range of $1.77 - $1.82 per diluted share. This projection assumes: high-single-digit net sales growth, including mid-single-digit comparable store sales growth in the U.S. and low-single-digit growth in Japan along with greater increases in other international regions; gross margin approximately equal to the prior-year; and high-single-digit SG&A (Selling, general and administrative) expense growth,” Michael J. Kowalski, chairman and chief executive officer, said.