Tiffany & Co. Marks Q1 12% Net Sales Growth; Strength in Asia-Pacific and Europe

However, net sales and comparable stores sales rose 8 and 3 percent respectively, on a constant exchange rate basis, demonstrating the damaging effects of the weak dollar.

Net earnings, which Tiffany noted surpassed management’s expectations due to higher-than-expected sales and operating margins, increased 20 percent to $64.4 million, while net earnings from continuing operations per diluted share increased 28 percent from $0.39 to $0.50.

The firm notes that, as Tiffany & Co has expanded its global reach, performance will now be assessed on a region-by-region basis, specifically in the Americas, Asia-Pacific and European regions, as opposed to a channel-of-distribution basis.

First quarter sales by region showed sales growth in the Americas region (including the U.S., Canada and Latin/South America) up 6 percent to $373.56 million. Comparable store sales in the U.S. showed no growth – equal to the previous year – consisting of a 16 percent increase in Tiffany’s New York flagship store (attributable to increased foreign tourist spending) and a 4 percent decline in branch store sales.

Combined catalog and internet sales in the U.S. rose 1 percent.

Sales in the Asia-Pacific region (including Japan, Asia-Pacific countries outside the U.S. and in the Middle East) increased 21 percent to $222 million. Sales rose 10 percent on a constant exchange rate basis and comparable store sales were up 4 percent, reflecting strong growth in all Asia-Pacific countries other than Japan.

European sales were up 38 percent to $60.1 million, 30 percent on a constant exchange rate basis and 12 percent in terms of comparable store sales.

Tiffany & Co also noted that “other sales” declined 21 percent, due to reduced wholesale sales of diamonds made in connection with the company’s diamond sourcing program.

A total of 192 Tiffany & Co stores and boutiques were operated during the quarter (81 in the Americas, 93 in the Asia-Pacific region and 18 in Europe), compared with 171 a year ago (74, 83 and 14 respectively).