New collections help Tiffany & Co. drive sales

The stronger dollar hurt Tiffany and Co. in the first quarter, but the retailer's new efforts to woo ultra-wealthy shoppers helped offset weakness in its tourist business.

The New York luxury jeweler reported better-than-expected net earnings of$105 million in the first quarter ended April 30, from $126 million a year earlier.Worldwide net sales dropped 5% to $962 million, from $1.01 billion. Worldwide same-store sales dropped 1%. Tiffany said it plans to open an unspecified number of new stores in key markets during fiscal 2015. It also plans to unveil more upscale jewelry lines, which have thus far appealed to the very rich.

“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,” said Frederic Cumenal, CEO. “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.”

In the Americas, total sales rose 1% to $444 million and same-store sales climbed 1%. This reflected higher sales to U.S. customers offset by lower foreign tourist spending in the U.S., as well as healthy sales growth in Canada and Latin America.



Looking ahead to fiscal 2015, Tiffany is maintaining guidance of net earnings in the second quarter declining at a more moderate rate than in the first quarter, followed by expected double-digit percentage net earnings growth in the second half of the year.