Tiffany & Company (TIF) has posted fourth-quarter 2009 results. The quarterly earnings of $1.09 per share rose 27% from 86 cents delivered in the prior-year quarter on the heels of cost-cutting, effective inventory management and top-line growth.
However, the quarterly earnings fell short of the Zacks Consensus Estimate of $1.13 per share by 4%. Earlier, in the first, second and third quarters of 2009, Tiffany had topped the Zacks Consensus Estimate by 5%, 24% and 43%, respectively. Shares of the company have fallen 2.41% or $1.61 to $45.64 in Monday morning trading, up from the pre-market dip.
On a reported basis, including one-time items, quarterly earnings came in at $1.10 per share versus 25 cents posted in the year-ago quarter.
Tiffany remains optimistic about fiscal 2010, and forecasts earnings in the range of $2.45 to $2.50 per share, which is ahead of the current Zacks Consensus Estimate of $2.42.
Net sales for the quarter jumped 17% to $981.4 million, following a decline of 3% in the third quarter and a decline of 16% in the second quarter of 2009, signaling the renewed demand for jewelry in the Americas, Asia-Pacific and European regions. Comparable-store sales soared 11%. In constant currencies, net sales climbed 13% and comps grew 8% during the quarter.
Tiffany now anticipates total net sales for fiscal 2010 to rise by 11%.
The jewelry market was hit hard by the recent global melt-down, which triggered a shift in focus to cheaper private label brands, but as the recession eased demand for luxury items also improved. Tiffany is well positioned to deliver robust sales and earnings growth. The company holds a significant position in the world jewelry market and is poised to benefit from its increased geographic reach.
By geographic segment, sales in the Americas grew 14% to $523.5 million, whereas comps rose 11% during the quarter; sales in the Asia-Pacific region jumped 14% to $318 million and comps increased 8%; sales in Europe climbed 29% to $122.9 million and comps rose 25%. Other sales were $17.1 million compared to $3.7 million in the year-ago quarter.
Excluding Japan, the Asia-Pacific region experienced a sales growth of 51% (up 38% in constant currencies). In constant currencies, sales fell 9% in Japan due to a similar percentage fall in comps. In constant currencies, sales increased 18% in Europe and comps were up 14%.
For fiscal year 2010, management expects a low-double digit percentage increase in sales in Americas, mid-teens growth in Europe, and a high-single digit increase in Asia-Pacific region. Other sales are expected to decline by 5%.
Tiffany opened 14 net stores in fiscal year 2009 as against 22 in 2008. In a tough retail environment, the company took prudent steps to move steadily rather than aggressively. At the end of fiscal 2009, the company operated 220 stores and boutiques (27 in Europe, 91 in the Americas and 102 in Asia-Pacific). With signs of improvement, the company now plans to open 17 stores (3 in Europe, 6 in the Americas, and 8 in Asia-Pacific) in fiscal 2010.
The company ended fiscal year 2009 with cash and cash equivalents of $785.7 million, total long-term debt of $726.4 million, and shareholders’ equity of $1,883.2 million. Capital expenditures for fiscal 2009 were $75 million versus $154 million in 2008 due to opening of fewer stores and cost management. Management expects capital expenditures of $200 million for fiscal 2010.
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