Tiffany shines on demand from Asia

A strong performance in Asia helped Tiffany & Co. beat fourth quarter expectations even as sales as its U.S. stores sagged.



The luxury jeweler reported net income of $157.8 million, or $1.26 per share, for the quarter ended Jan. 31, compared with $163.2 million, or $1.28 per share, in the year-ago period. Adjusted for asset impairment costs, per-share earnings were $1.45, beating the per-share earnings of $1.37 that industry analysts had expected.



Total revenue in the quarter rose 1% to $1.23 billion, just ahead of analyst projections.



In the Americas, total sales in the quarter fell 3% to $587 million, and same-store sales declined 2%. For the full year, total sales declined 5% to $1.8 billion and same-store sales declined 6%. Management attributed the results to lower spending by U.S. customers and foreign tourists.



In addition, sales at Tiffany’s New York flagship store, where traffic has been impacted by security barricades around Trump Tower, declined 11% in the full year and 7% in the fourth quarter, and represented less than 10% of worldwide net sales in both periods.



"We attributed a portion of the softness in the U.S. throughout the year on local customers, which we believe was tied to macro market and political uncertainties," said Tiffany VP of investor relations Mark Aron on the company’s quarterly earnings call.



On the call, Tiffany forecast mid-single-digit percentage growth for full-year earnings per share, excluding some items.



“Despite macroeconomic and geopolitical challenges in the past year that we believe will continue in 2017, we strongly believe that Tiffany’s strategies are sound and that we have meaningful growth opportunities,” said Michael J. Kowalski, chairman and CEO. “Our management team is focused on accelerating the execution of our strategies to deliver extraordinary products, communications and experiences that will delight our customers around the world. Through strong leadership and this accelerated execution, we believe we are well-positioned to deliver attractive total shareholder return over the long-term.”



At January 31, 2017, Tiffany operated 313 stores (125 in the Americas, 85 in Asia-Pacific, 55 in Japan, 43 in Europe, and five in the UAE), versus 307 stores a year ago (124 in the Americas, 81 in Asia-Pacific, 56 in Japan, 41 in Europe, and five in the UAE).