Tiffany Profit Jumps 70%, Bucking Retail Trend
Tiffany & Co. said Wednesday that profit surged 70% in the latest quarter, well above analysts’ estimates, but some other retailers posted weak earnings on sluggish sales.
Tiffany, a luxury retailer known for its signature blue gift boxes, has managed to shine in what has otherwise been a tarnished summer for many retailers. Apparel retailers have been particularly hard hit.
Upscale Nordstrom Inc. posted a 21% drop in operating profit, and discount clothing retailer Ross Stores Inc. said earnings fell 7%.
Tiffany’s earnings climbed to $39.2 million, or 26 cents a share, in its fiscal second quarter ended July 31 on strong sales growth in the U.S. and Japan, the New York-based company’s largest international market. Analysts had forecast 22 cents.
Sales jumped 21% to $372 million. Margins also improved.
Higher sales are expected in the second half and may push Tiffany’s annual earnings above forecasts, analysts said.
Shares in Tiffany, which have jumped 73% in the last year, fell $1.81 to close at $38.56 on the New York Stock Exchange. Analysts expect Tiffany’s stellar profit growth to slow during the next five years, rising an average 18%.
At a Glance
Other earnings, excluding one-time gains or charges unless noted:
* Consolidated Stores Corp., operator of Pic ‘N’ Save and other chains, said its fiscal second-quarter loss widened to $62.7 million, or 56 cents a share, from $4.4 million, or 4 cents, a year ago as the company began recording the planned divestiture of its KB Toy unit. Analysts were expecting a loss of 18 cents. Sales rose 10% to $708.5 million.
* Nordstrom’s earnings fell to $55.9 million, or 40 cents a share, in its fiscal second quarter on price markdowns and increased costs. Sales were up 0.7% to $1.45 billion. The company said last month that it expected profit to fall as much as 16 cents below the 55-cent consensus estimate. The latest results exclude a pretax charge of $10.5 million, or 5 cents a share after tax, to reflect the decline of its $33-million investment in Streamline.com Inc.
* Restoration Hardware Inc. said its net loss widened to $3.4 million, or 20 cents a share, from $2.6 million, or 15 cents, a year ago. The home furnishings retailer said sales rose 32% to $71.2 million, but same-store sales were up a slight 0.8%.
* Ross Stores said fiscal second-quarter earnings fell 7% to $35.9 million, or 43 cents a share. Revenue rose 6.9% to $657 million. But sales at stores open more than a year were flat and were down in the first two weeks of August, Ross said. If that trend continues, third-quarter earnings would be less than last year’s 38 cents a share, missing analysts’ estimates of 39 cents, it said.
* Talbots Inc. said profit nearly quadrupled in its fiscal second quarter to $14.6 million, or 46 cents a share, from $3.76 million, or 12 cents, a year ago as the apparel retailer sold more items at full price. Sales were up 17% to $356.6 million. The earnings met analyst expectations that had been raised from 33 cents this month after Talbots said earnings would reach 44 cents to 46 cents.
