Tiffany & Co. reported increases in net sales and net earnings in its first fiscal quarter, ended April 30, from international sales growth and a higher gross margin. U.S. sales were relatively flat for the period.
Net sales of $540 million were 6 percent higher than $510 million in the first quarter of 2005. On a constant-exchange-rate basis which excludes the effects of translating foreign-currency-denominated sales into U.S. dollars (see attached “Non-GAAP Measures” schedule), net sales rose 9 percent and worldwide comparable store sales increased 5%.
Net earnings increased 8 percent to $43.1 million, from $40 million for the same period in the previous year. Earnings before income taxes increased 13 percent.
Sales by channel of distribution are as follows:
* U.S. Retail sales increased 2 percent to $260 million and comparable store sales declined 1 percent. Comparable branch store sales were equal to the prior year and sales in the New York flagship store declined 7 percent.
* International Retail sales, in U.S. dollars, increased 13 percent to $215.1 million. On a constant-exchange-rate basis, sales rose 21 percent due to 15 percent total retail sales growth in Japan and increases in other regions; on that same basis, comparable international store sales rose 16 percent due to increases of 12 percent in Japan, 20 percent in the Asia-Pacific region outside Japan, and 24 percent in Europe.
* Direct Marketing sales rose 4 percent to $30 million, due to increases both in the number of orders shipped and the average order size.
* Other sales declined 4 percent to $33.5 million.
“We are very pleased with the geographically broad-based strength in our international stores and are encouraged with Tiffany’s results in Japan,” said Michael J. Kowalski, Tiffany chairman and chief executive officer. “U.S. Retail sales results were disappointing, but it should be viewed relative to a strong 14 percent increase in last year’s first quarter.”