Tiffany Tops Q1 Expectations, Shares Surge

Shares of

surged more than 3 percent in pre-market trading after the company reported stronger-than-expected results for the first quarter on Wednesday. The New York-based company reported quarterly net earnings of $104.9 million, or $0.81 per share, versus $125.6 million, or $0.97 per share, in the year-ago period. Its net sales slipped 5 percent year-over-year to $962.4 million. However, analysts were expecting earnings of $0.70 per share on revenue of $918.68 million. The average estimate among 21 Estimize users was for earnings of $0.78 per share and revenue of $958.58 million. Worldwide same-store sales slipped 7 percent during the quarter. In the Americas, comparable store sales rose 1 percent year-over-year, while comparable store sales in the Asia-Pacific region gained 2 percent. In Japan, comparable store sales dropped 24 percent, while comparable store sales in Europe jumped 17 percent. Its gross margin widened to 59.1 percent from 58.2 percent. In the first quarter, Tiffany opened 3 Company-operated stores. At April 30, 2015, the company had $715 million in cash and cash equivalents and short-term investments, versus $381 million a year earlier. Frederic Cumenal, chief executive officer, said, "We started the year facing well-known challenges from both global economic uncertainties and the effect of a strong U.S. dollar on the translation of foreign-denominated sales into dollars and on foreign tourist spending in the U.S., as well as a difficult sales comparison in Japan. Despite those factors, our first quarter results for net sales, as well as for gross margin and net earnings, were somewhat better than we anticipated. First quarter highlights also included the continuing success of the stylish TIFFANY T jewelry collection, as well as the launch of our extraordinary CT60™ watch collection." For the fiscal year, the company continues to expect minimal growth in EPS, versus adjusted earnings of $4.20 per share in fiscal 2014. Tiffany shares gained 3.47 percent to $88.50 in pre-market trading.