As the holiday shopping season begins Tiffany & Co. appears poised to take full advantage.
The luxury jewelry retailer said Wednesday that worldwide net sales for the third quarter increased 14 percent to $681.7 million, with growth in all geographic regions. On a constant-exchange-rate basis, which excludes the effect of translating foreign-currency-denominated sales into U.S. dollars, worldwide net and comparable store sales increased 12 percent and 7 percent, respectively.
The sales increase and a higher operating margin contributed to a higher-than-expected 27 percent increase in net earnings for the period, ended October 31, the company said. Net earnings from continuing operations adjusted to exclude nonrecurring items increased 43 percent.
"As third quarter results demonstrate once again, Tiffany's expanding, globally diversified store presence provides a significant platform to generate sustainable sales and earnings growth," said Michael J. Kowalski, Tiffany chairman and CEO.
Sales in the Americas region, which includes the U.S., Canada and Latin/South America, increased 9 percent to $331.8 million in the third quarter. On a constant-exchange-rate basis, sales increased 9 percent and comparable store sales increased 5 percent. Sales at Tiffany’s flagship store in New York declined by 3 percent for the period. Branch store sales in the Americas increased 8 percent. Internet and catalog sales in the Americas increased 7 percent fir the quarter.
Sales in Japan rose 12 percent to $130.8 million in the third quarter. On a constant-exchange-rate basis, sales increased 2 percent. Comparable retail store sales declined 2 percent for the quarter.
Sales in Asia-Pacific increased 24 percent to $127.1 million in the third quarter. On a constant-exchange-rate basis, sales increased 20 percent in the quarter, due to strong growth in most countries, the company said. Comparable store sales rose 11 percent.
Sales in Europe increased 22 percent to $77.5 million in the third quarter and 29 percent on a constant-exchange-rate basis. Sales increased 29 percent in the quarter, with double-digit percentage growth in the U.K. and most of continental Europe, the company said.
Other sales increased 26 percent to $14.6 million in the third quarter due to increased wholesale sales of finished goods to independent distributors within emerging markets; wholesale sales of rough diamonds increased in the year-to-date.
"We are quite pleased with the performance of new stores and recent product introductions including the yellow diamond and leather goods collections," Kowalski said, adding that the company is increasing its full-year outlook.
For the full year, ending January 31, 2011, worldwide sales are projected to increase by 12 percent, the company said. By region, sales for the year are expected to increase approximately 10 percent in the Americas, by a mid-twenties percentage in Asia-Pacific, by a low-single-digit percentage in Japan and by a high-teens percentage in Europe, the company said. Other sales are expected to decline modestly.