Tiffany Holiday Sales Up 4%, Comps Flat, at ‘Low-End Of Expectations’

Tiffany & Co. said Thursday that worldwide net sales increased 4 percent to $992 million for the November-December holiday period, while same store sales were unchanged from the prior year.

“Holiday period sales growth was at the low-end of our expectations, and we now expect that net earnings for the year ending January 31 will be at the lower-end of the forecast that we issued on November 29 of $3.20 – $3.40 per diluted share,” said Michael J. Kowalski, Tiffany chairman and CEO. “Due to uncertainty about general economic conditions in all our major markets, management is planning sales growth conservatively for 2013 and at this point expects net earnings growth of 6 percent – 9 percent.”

Net sales for the holiday period by region and category include:

Sales in the Americas region increased 3 percent to $516 million in the holiday period. On a constant-exchange-rate basis, total sales increased 2 percent, and same store sales declined 2 percent in the New York flagship store and in branch stores. Performance was relatively similar across much of the region. Internet and catalog sales rose 4 percent.

Sales in the Asia-Pacific region increased 13 percent to $187 million. On a constant-exchange-rate basis, total sales increased 11 percent (due to growth in Greater China and most other markets) and same store sales rose 7 percent.

In Japan, total sales declined 5 percent to $153 million. However, on a constant-exchange-rate basis, both total sales and comparable store sales rose 1 percent.

In Europe, sales increased 2 percent to $119 million due to mixed performances by country. On a constant-exchange-rate basis, total sales also increased 2 percent and same store sales were flat.

Other sales increased 114 percent to $17 million, largely reflecting the conversion in July of five Tiffany stores in the United Arab Emirates from independently-operated distribution to company-operated retail stores.

“Looking forward, we are formulating plans for continued store expansion and new product introductions in 2013,” Kowalski said.

Tiffany currently operates about 274 stores (115 in the Americas, 65 in Asia-Pacific, 55 in Japan, 34 in Europe and five in the U.A.E.), compared with 246 stores (102 in the Americas, 57 in Asia-Pacific, 55 in Japan and 32 in Europe) a year ago.

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$1 Billion Increase in 2012 Swatch Group Sales

Swatch Group, the world’s leading supplier of finished watches and watch movements, said Thursday that annual gross sales for 2012 increased by $1 billion, year-over-year. Its 2012 gross sales totaled 8.143 billion Swiss francs ($8.88 billion), a 14 percent increase over 2011 gross sales.

The Swiss company said in a statement that its 2012 watch and jewelry gross sales increased 15.6 percent year-over-year, to nearly 7.3 billion Swiss francs ($7.96 billion), led by sales in China, with double-digit increases for all of its brands.

In the production segment of the company, capacity was expanded, resulting in improved performance. This led to a 10.1 percent increase in gross sales to 2.21 billion Swiss francs ($2.41 billion). Bottlenecks, which had been a problem in past years due to robust demand, were reduced in 2012, the company said.

Its electronics systems segment “is still exposed to a combination of strong price pressure and adverse exchange rates,” the company said. As a result, gross sales decreased by 7.4 percent in 2012 to 311 million Swiss francs ($339,373).

The Swatch Group brand, Omega, is the official timekeeper for the Olympics, which meant that the company had major marketing expenses during the 2012 London Summer Olympics. This along with “unsatisfactory currency developments” will hit projected operating profit and net income. However, the company said it still expects “good results.”

The company also said that the first 10 days of January saw strong sales, indicating “healthy growth” for 2013.

Based in Biel—the vertically integrated company with full manufacturing capabilities, branded retail outlets and alliances with other retailers throughout the world—owns and operates the following brands: Breguet, Blancpain, Glashütte Original, Jaquet Droz, Léon Hatot, Omega, Longines, Rado, Union Glashütte, Tissot, Calvin Klein Watches + Jewelry, Balmain, Certina, Mido, Hamilton, Swatch, Flik Flak, Endura and Tourbillon.

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Jewelry and Watch Sales Sparkle for LVMH

LVMH Moët Hennessy Louis Vuitton, the world’s leading high quality products group, said revenue for the first nine months of 2011 rose 15 percent year-over-year to 16.3 billion euros ($22.3 billion). Organic revenue growth was 15 percent after the currency impact was compensated by the June 30 consolidation of Italian luxury jeweler, Bulgari, into the LVMH structure.

The third quarter continued the trend of strong growth evident since the start of the year, the Paris-based conglomerate said. The momentum continued in Asia, Europe and the United States, while Japan returned to growth over the period. In its outlook, the company said it expects the same revenue growth to continue till the end of the year.

The Watches & Jewelry division (which includes the brands TAG Heuer, Zenith and Hublot), while fifth among the company’s six business units in overall income, was the strongest performer for the nine-month period, recording a 76 percent revenue increase (26 percent organic growth) to 1.2 billion euros ($1.7 billion). The third quarter was marked by the public offer for the outstanding minority shares in Bulgari, which the company said, is performing well across all product categories. TAG Heuer enhanced its feminine product offering with a new jewelry extension to its Formula 1 line and has expanded its presence in Asia. Hublot continues the successful roll-out of the Classic Fusion collection. Driven by the excellent progress of its El Primero and Captain ranges, Zenith continues to demonstrate the strong appeal of its high quality chronographs. The other jewelry brands, Chaumet, Fred and De Beers continued their positive momentum through their own store network, the company said.

Results for its other businesses during the nine month-period are as follows:

Revenue for the Wines & Spirits group (which includes Moët & Chandon, Dom Pérignon, and Jas Hennessy & Co.) increased 7 percent (11% organic) to 2.3 billion euros ($3.2 billion), led by champagne and premium alcohol sales.

Fashion & Leather Goods group (which includes Louis Vuitton, Thomas Pink and Marc Jacobs) grew 13 percent (15% organic) to 6.2 billion euros ($8.5 billion).

Perfumes & Cosmetics group (Christian Dior, Guerlain and Parfums Givenchy) saw its sales rise 3 percent (10% organic) to $2.3 billion euros ($3.2 billion)for the period, led by the sustained growth of its flagship product lines.

Selective Retailing group (which includes DFS, Sephora and La Samaritaine) sales increased 18 percent (19% organic) to $4.3 billion ($5.9 billion), benefiting from the expansion of Asian tourism, which was particularly strong in Hong Kong and Macao.

Its businesses listed as “other activities,” recorded a slight loss.

Blue Nile Sales Up 0.8%

Diamond and fine jewelry Internet retailer Blue Nile, Inc. said Thursday that net sales for the third quarter rose 0.8 percent, year-over-year, to $67.5 million, led by non-engagement jewelry. The Seattle-based company said it expects strong sales growth in the fourth quarter.

Operating income for the company increased 9.8 percent to $4.2 million. Operating income represented 6.3 percent of net sales, compared to 5.8 percent a year ago. Net income increased 7.7 percent to $2.8 million.

Non-GAAP adjusted EBITDA for the quarter totaled $6.6 million, a record third quarter level. For the trailing twelve month period ended October 3, 2010, net cash provided by operating activities totaled $26.2 million and non-GAAP free cash flow totaled $24.3 million.

“We delivered record third quarter sales, operating income, non-GAAP adjusted EBITDA, and earnings per share in what remains a challenging consumer environment. During the quarter, sales trends were uneven and reflected consumer confidence levels, which were at historic lows,” said Diane Irvine, Blue Nile CEO. "Sales trends have improved in the current quarter, and we remain focused on providing an exceptional experience to our customers. Across the business, we are gearing up for our peak holiday season.”

The company said fourth quarter net sales are expected to be between $106 million and $115 million, representing a year-over-year growth of 3 percent to 12 percent compared to fourth quarter 2009.

Highlights for the third quarter, ended October 3, include:

* International sales grew 5.7 percent in the quarter to $9.3 million, representing a record 14 percent of total sales. Excluding the impact from foreign exchange rates, international sales increased 3.4 percent. The company reported strong sales growth in its Canada and Asia/Asia-Pacific markets, while sales were weak in the U.K. and Europe because of global economic concerns combined with weaker currencies compared to the U.S. dollar.

* Gross profit for the quarter totaled $14.6 million, compared to $14.8 million a year ago. As a percentage of sales, gross profit totaled 21.7 percent. Within product categories, sales growth was relatively stronger in non-engagement jewelry as compared to the diamond engagement category.

* Selling, general and administrative expenses for the quarter were $10.4 million, compared to $10.9 million in the previous year, representing 15.4 percent of sales, compared to 16.3 percent last year.