New York-based Tiffany & Co. posted a 6% rise in first-quarter earnings, boosted by improved profit margins despite a slender rise in total sales.
Tiffany said that while the number of customer transactions climbed, the average price-per-transaction fell, a sign that shoppers shifted toward buying cheaper items such as silver.
Tiffany forecast second-quarter profits of 22 cents to 24 cents. The luxury retailer said even though it is introducing new jewelry designs to keep customers buying, it sees the U.S. economic environment as being challenging in the near-term, with conditions improving in the second half of the year.
In the quarter ended April 30, Tiffany posted net income of $32.7 million compared with $30.7 million in the same period a year earlier.
Sales in the latest quarter edged up 3% to $347.1 million from $336.4 million in the prior year. Same-store sales rose 2%, while the company’s flagship store on Fifth Avenue in Manhattan, which accounts for 11% of total sales, showed a dip of less than 1%.
Tiffany’s business had been weak since the middle of last year, mainly due to the U.S. economic slump and the after-effects of the Sept. 11 attacks, which have kept tourists away.