Tiffany reports a 12% increase in net holiday sales, 6% rise in same-store sales

Tiffany & Co. on Friday said that its net sales in the holiday period from Nov. 1 to Dec. 31 increased 12% over the prior-year period to nearly $673.8 million, and worldwide comparable store sales rose 6%. On a constant-exchange-rate basis, which excludes the effect of translating local-currency-denominated sales into U.S. dollars, net sales rose 10% and worldwide comparable store sales increased 4%.

The company said the unaudited sales results are generally consistent with its projections.

Holiday season sales results in Tiffany’s four channels of distribution, and as compared with the prior year, were as follows:

U.S. Retail sales rose 11% to $340.8 million largely due to a comparable store sales increase of 8% (up 10% in November and 7% in December). Sales in the New York flagship store rose 11% and comparable branch store sales increased 7%. The geographically broad-based comparable store sales growth was due to higher spending per transaction. Contributing to the overall increase were four new stores (Palm Beach Gardens, Fla., Edina, Minn., Kansas City, Mo., and Westport, Conn.), which opened in 2004 and posted strong results above expectations.

International Retail sales increased 12% to $242.2 million. On a constant-exchange-rate basis, sales rose 6% and comparable store sales declined 2%. On a constant-exchange-rate basis, comparable store sales declined 7% in Japan (total retail sales rose fractionally), increased 5% in other Asia-Pacific markets and rose 3% in Europe.

Direct Marketing sales rose 11% to $72 million. Combined Internet and catalog sales rose 13%, which included higher growth in e-commerce sales due to an increased average order size. Sales in the Business Sales division rose 3%.

Specialty Retail sales increased 47% to $18. million, partly reflecting sales growth in Little Switzerland stores. In addition, almost half of the increase was due to the startup in 2004 of sales of rough diamonds. Specialty Retail sales also include results from the first two IRIDESSE stores, which recently opened and focus exclusively on the pearl jewelry category.

“These sales results well position Tiffany to end the year on a positive note,” said Michael J. Kowalski, Tiffany chairman and CEO. “These results are especially noteworthy given last year’s strong holiday season performance when comparable U.S. store sales increased 16% and combined Internet/catalog sales rose 27%. This holiday season, we saw solid growth in all jewelry categories and in watches. Diamond jewelry continued to be an especially strong performer and we were extremely pleased with customers’ response to our new product introductions, including the new ATLAS jewelry collection. In Japan, comparable store sales results remained below our expectations; however, despite challenging market conditions, we believe our initiatives with new stores and products will ultimately lead to improved performance.”

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