Tiffany & Co. reported a 9-percent rise in global sales to $895 million and an increase in net earnings of 3 percent to $84 million for the first quarter ended April 30.

 

On a constant-exchange-rate basis that excludes the effect of translating foreign-currency-denominated sales into U.S. dollars, worldwide net sales increased 13 percent and comparable store sales rose 8 percent.

 

Chairman and CEO Michael J. Kowalski said, “Worldwide, first quarter sales exceeded our expectations, enabling us to improve our sales leverage on fixed expenses and achieve earnings growth.”

 

Sales in the Americas region rose 6 percent to $408 million. On a constant-exchange-rate basis, total sales also increased 6 percent. Comparable store sales rose 3 percent with relatively stronger growth in the New York flagship store.

 

In the Asia-Pacific region, total sales of $223 million were 15 percent higher than a year before. On a constant-exchange-rate basis, total sales rose 14 percent, due to sales growth in Greater China and most other countries, and comparable store sales jumped 9 percent.

 

Total sales in Japan edged up 2 percent to $145 million despite a negative translation effect from a weakening yen. On a constant-exchange-rate basis, total sales surged 20 percent and comparable store sales soared 21 percent due to particularly strong growth in Tiffany’s engagement and higher-end jewelry categories.

 

In Europe, sales came to $93 million, 6 percent higher than the same quarter last year due to sales growth across continental Europe. On a constant-exchange-rate basis, total sales and comparable store sales rose 8 percent and 6 percent respectively.

 

Other sales tripled to $27 million from $9 million in the prior year, primarily reflecting the conversion in July 2012 of five Tiffany & Co. stores in the United Arab Emirates from independently-operated to company-operated.

 

In the first quarter, Tiffany opened one store, in Xi’an, China and closed one in Taichung, Taiwan. As of April 30, the company operated 275 stores (115 in the Americas, 66 in Asia-Pacific, 55 in Japan, 34 in Europe and five in the U.A.E.), compared with 251 stores (105 in the Americas, 59 in Asia-Pacific, 55 in Japan and 32 in Europe) a year ago.

 

The company had cash and cash equivalents of $465 million as of April 30, versus $322 million the year before.

 

Net inventories were $2.3 billion at April 30, 2013, or 4 percent higher than a year ago.

 

Kowalski added, “While first quarter sales and earnings exceeded our expectations, we are maintaining our earnings forecast for the full year, mindful of continuing soft sales results in the Americas and the negative translation effect of a weaker yen.

 

For the fiscal year ending January 31, 2014, management forecasts net earnings in a range of $3.43-$3.53 per diluted share, unchanged from its previously-published outlook and compared with $3.25 per diluted share in 2012.

 

The forecast is based on the following assumptions, among others, that worldwide net sales will rise by a mid-single-digit percentage in U.S dollars, the addition of a net 14 company-operated stores (opening six in the Americas, seven in Asia-Pacific and three in Europe, and closing one each in Japan and Taiwan), and the refurbishing of a number of existing locations around the world.