Tiffany 1Q results rise, tops expectations

NEW YORK (AP) — Tiffany & Co. reported a 3 percent increase in first-quarter net income, fueled by solid sales improvement across the regions, particularly in Asia.

The results, announced Tuesday, beat Wall Street expectations, and its shares briefly rose to their highest level in almost two years in morning trading.

Tiffany is a barometer of luxury spending so the latest results show the resilience among affluent shoppers despite economic challenges around the globe. Still, the company stuck to its profit outlook for the year, citing a weaker yen as well as ongoing weak sales in the North America region.

The high-end jewelry company known for its blue boxes earned $83.6 million, or 65 cents per share, for the period ended April 30. That's up from $81.5 million, or 64 cents per share, a year ago.

Excluding costs tied to staff and occupancy cuts, earnings were 70 cents per share. This easily beat the 53 cents per share analyst expected.

Revenue for the New York company rose 10 percent to $895.5 million from $819.2 million, topping Wall Street's $855.7 million estimate.

Sales increased 9 percent globally to $895 million. The conversion of five Tiffany stores in the United Arab Emirates to company-run stores from independently-run stores in July helped other sales triple to $27 million. Sales for the Asia-Pacific region rose 15 percent to $223 million.

In the Americas, the company's largest division, sales climbed 6 percent to $408 million. During a pre-recorded call with investors on Tuesday, company officials said business was below expectations and said that the increase was entirely due to price increases.

Sales growth in its New York flagship store on Fifth Avenue was higher than the other regions' increases as the company benefited from purchases tied to a big anniversary event in April as well as from foreign tourism, which represents almost half of that store' sales.

Tiffany said it is no longer offering specific sales figures for its New York Fifth Avenue store since it now represents only 8 percent of the company's worldwide sales. The company also cited pronounced weakness in its Hawaii and Guam stores, reflecting less Japanese tourist spending.

European sales increased 6 percent to $93 million, despite continued weakness in the United Kingdom. Sales in the Asia-Pacific region surged a better-than-expected 15 percent to $223 million due to increases in average price as well as growth in the number products sold across all jewelry categories.

Sales in Japan rose 2 percent to $145 million.

But Tiffany reaffirmed its fiscal 2013 earnings forecast of $3.43 to $3.53 per share on Tuesday. Wall Street predicts $3.48 per share.

"We are encouraged with the start of the year but caution you not to draw overly optimistic conclusions from the first quarter, which generates a relatively small percentage of sales and earnings in comparison with annual results," Mark Aaron, a Tiffany spokesman told investors in the pre-recorded call.

The company had 275 stores at quarter's end.