Free Trial!
Today’s Best Stocks To Trade! Click Here
Third Quarter Results
The New York-based company's net income for the third quarter more than tripled to $98.89 million or $0.71 per share from $29.14 million or $0.21 per share in the year-ago quarter. Sequentially too, net earnings rose from $36.97 million or $0.26 per share in the prior quarter.
Tiffany said that the sale-leaseback of the multi-tenant building housing the company's Tokyo flagship store was completed for proceeds of $328.00 million during the quarter. The company recorded a pre-tax gain of $105.05 million or $0.48 per share after tax as other operating income, and said that a deferred pre-tax gain of $75.24 million will be amortized in SG&A expenses over a fifteen-year period.
In addition, Tiffany completed the sale-leaseback of the single-tenant building housing its flagship store in London in the quarter for proceeds of $149 million. The company said that the entire pre-tax gain of $63.96 million on that transaction was deferred and will be amortized in SG&A expenses over a fifteen-year period.
Net earnings from continuing operations for the most recent quarter also more than tripled to $100.45 million or $0.72 per share from $32.63 million or $0.23 per share in the previous-year quarter. On average, 14 analysts surveyed by First Call/Thomson Financial expected the company to report earnings of $0.25 per share for the quarter.
Net sales for the quarter climbed 18% to $627.32 million from $531.83 million in the previous-year quarter, reflecting strong sales in the U.S. and international markets. Ten Wall Street analysts' consensus estimate for the quarter was $616.17 million. However, compared to second quarter revenues of $662.56 million, revenues for the latest quarter declined. On a non-GAAP basis, sales for the quarter expanded 16%, due to a 9% increase in worldwide comparable store sales and sales from new stores.
Tiffany's third quarter comparable store sales grew 8% in the U.S. and 10% on a constant-exchange-rate basis internationally.
Commenting on the results, the company's chairman and chief executive officer Michael Kowalski said, "Tiffany's focused growth strategies in distribution, merchandising and marketing continue to prove very effective. We are pleased with our overall businesses in the U.S. and internationally, as well as with product performance ranging from robust diamond jewelry sales to a healthy increase in silver jewelry sales."
The company disclosed that its U.S. retail sales recorded 12% growth to $302.67 million on increases in transaction as well as higher spending per transaction. Comparable store sales increased 8% in the quarter. Sales in the New York flagship store surged 25%, while comparable branch store sales increased 4%. During the quarter, Tiffany opened three new U.S. stores. The company operated 68 Tiffany & Co. stores in the U.S. at the end of the quarter, compared to 63 stores a year ago.
International retail sales grew 22% to $270.85 million and increased 18% on a constant-exchange-rate basis, due to strong growth in most markets and an increase in Japan. During the quarter, Tiffany opened six retail locations, including in Japan, Macau, Malaysia, Hong Kong, London and Mexico City. The Company operated 113 Tiffany & Co. international stores and boutiques at the end of the period, compared to 101 locations a year ago.
Direct Marketing sales improved 4% to $31.37 million due to an increase in the average amount spent per order. Tiffany said that its other sales for the quarter jumped 137% to $22.43 million, largely due to wholesale sales of diamonds. In addition, sales at the company's Iridesse Stores increased. The company noted the results for the Little Switzerland business were recorded in discontinued operations.
Tiffany's gross profit for the quarter climbed to $337.14 million from $287.35 million in the prior-year period. However, gross margin declined to 53.7% from 54% a year ago, with the decline largely due to increased wholesale sales of diamonds.
Other operating income for the quarter was $105.05 million, on the sale-leaseback of the multi-tenant building housing the company's Tokyo flagship store.
Selling, general and administrative costs increased to $288.40 million from $239.70 million in the similar period of last year, and include the company's contribution of $10.00 million or $0.04 per share after-tax, to the Tiffany & Co. Foundation. Excluding the contribution, selling, general and administrative expenses increased 16% in the quarter reflecting higher labor and occupancy costs as well as marketing expenses.
Earnings from continuing operations for the quarter rose to $153.79 million from $47.66 million a year ago.
Provision for income taxes for the latest quarter was $51.03 million compared to $16.32 million in the prior-year period. Loss from discontinued operations was $1.56 million compared to loss of $3.48 million in the previous-year quarter.
Tiffany said it repurchased and retired 1,892,290 shares of its common stock in the quarter for a total cost of $97.04 million or for an average price of $51.28 per share. The company still has about $331 million available for share buy back under its current authorization program. The debt: equity ratio was 24% at October 31, 2007, compared to 39% a year ago.
Year-To-Date Results
For the nine-month period, Tiffany's net earnings surged 64% to $185.52 million or $1.33 per share from $113.43 million or $0.80 per share in the year-ago period.
Net income for the latest nine-month period includes an after-tax charge of $22.60 million or $0.16 per share related to the sale of Little Switzerland.
Net earnings from continuing operations rose 76% to $213.07 million or $1.52 per share from $120.82 million or $0.85 per share in the corresponding period last year.
Net sales for the nine-month period increased 18% to $1.89 billion from $1.60 billion in the previous-year period. On a constant-exchange-rate basis, net sales climbed 17% and worldwide comparable store sales increased 10%.
Outlook
Looking ahead to fiscal year 2007, Tiffany lifted its outlook for earnings from continuing operations, excluding items, to a range of $2.25-$2.30 per share from the prior range of $2.22-$2.27 per share. The company also raised its outlook for full-year sales growth to approximately 15% from the previous 14%. Analysts expect the company to report earnings of $2.29 per share on revenues of $2.97 billion for the year.
Net earnings for the full year, including charges related to the sale of Little Switzerland and losses from operations, are now projected in a range of $2.49-$2.54 per share compared to the previous range of $2.44-$2.49 per share.
Including an after-tax gain of $0.48 per share from the sale of the Tokyo store and $0.04 per share contribution to the Tiffany & Co. foundation, the company raised its outlook for net earnings from continuing operations for the year to a range of $2.69-$2.74 per share from the prior range of $2.64-$2.69 per share.
Kowalski said, "We are now one month into the all-important November-December holiday season and are pleased with overall sales growth that is meeting our expectations. The vast majority of holiday season business is still ahead of us, so it is premature to extrapolate recent results or draw any conclusions about consumer spending. We will report those results on January 11th."
Stock Movement
TIF closed Thursday's regular trading session at $48.75, down $1.48 on a volume of 3.99 million shares. In Friday's pre-market trading, the stock is currently trading at $50.20, up $1.45 or 2.97%. In the 52-week period, the stock has been trading in a range of $37.45-$57.34.
For comments and feedback: contact editorial@rttnews.com Copyright(c) 2007 RealTimeTraders.com, Inc. All Rights Reserved
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
