Tiffany & Co (TIF 93.99, +4.01) has climbed 4.5% in pre-market action after beating earnings estimates and issuing optimistic guidance.
The jeweler reported above-consensus earnings of $1.45 per share on a 1.3% year-over-year increase in revenue to $1.23 billion, which was just north of market expectations. This was the second consecutive quarter with year-over-year revenue growth after the previous seven reports all showed falling revenue.
Comparable store sales were unchanged year-over-year while gross margin improved to 64.1% from 63.0% one year ago. Favorable product input costs, price increases in the previous year, and favorable changes in product sales mix contributed to the improvement.
Looking at the regional breakdown, sales in the Americas declined 3.0% year-over-year to $587 million while comparable store sales fell 2.0%. Lower spending by U.S. customers and foreign tourists was blamed for the decline. Sales at Tiffany's New York flagship store declined 7.0% during the fourth quarter.
Asia-Pacific sales rose 9.0% to $284 million thanks to new store openings. Comparable store sales fell 2.0%. The company noted that spending by foreign tourists was down.
Sales in Japan rose 15.0% year-over-year to $185 million with comparable store sales jumping 19.0%. Higher spending by local customers outweighed lower spending by Chinese tourists.
European sales declined 7.0% year-over-year to $146 million with comparable store sales falling 9.0%. Lower spending by local customers and foreign tourists was cited for the decline. However, constant-exchange-rate sales growth in the UK took place due to higher foreign tourist spending.
Other sales declined 12.0% year-over-year to $28 million with comparable store sales falling 3.0% due to lower retail sales in the United Arab Emirates. Wholesale sales of diamonds were little changed year-over-year.
The company ended the year with 3.0% more gross retail square footage after opening 11 stores, closing five, and relocating another five. The company had 313 stores at the end of the quarter.
Tiffany's quarterly report has helped the stock climb to levels not seen since the second half of 2015.
Going forward, the company's management expects that worldwide net sales will increase by a low-single-digit percentage during fiscal 2017 while earnings are expected to show mid-single-digit percentage growth.