Tiffany & Co. posts small increase in sales and profit in fourth quarter

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Luxury jeweler Tiffany & Co.'s worldwide net sales increased 4 percent to US$1.2 billion in the fourth quarter, while net earnings rose 1 percent US$180 million.

For the fiscal year ended January 31, 2013, worldwide net sales increased 4 percent to US$3.8 billion, while net earnings declined by 5 percent to US$416 million.

Chairman and Chief Executive Officer Michael J. Kowalski said, "These quarterly sales results were consistent with the holiday trends we had issued in early January. While financial results in fiscal 2012 were disappointing due to lower-than-expected sales growth and pressures on gross margin, we continued to maintain a longer-term focus on strengthening global awareness of the Tiffany & Co. brand and on further developing compelling product offerings."

Total sales in the Americas region increased 2 percent to US$620 million in the fourth quarter and 2 percent to US$1.8 billion in the full year (representing 48 percent of 2012 worldwide sales). On a constant-exchange-rate basis, total sales increased 2 percent in both the quarter and full year; on that basis, comparable store sales declined 2 percent in both the quarter and full year (sales in the New York flagship store declined 3 percent in both the quarter and full year, while comparable branch store sales were 2 percent below both prior-year periods with no meaningful geographical differences in the U.S.).

Internet and catalog sales rose 6 percent and 4 percent in the fourth quarter and full year.

In the Asia-Pacific region, total sales rose 13 percent to US$254 million in the fourth quarter and 8 percent to US$810 million, or 21 percent of worldwide sales, in the full year. On a constant-exchange-rate basis, total sales rose 10 percent in the fourth quarter due to sales growth in Greater China and in other markets and rose 8 percent in the full year; on that basis, comparable store sales rose 6 percent in the quarter and 2 percent in the full year.

Total sales in Japan declined 6 percent to US$192 million in the fourth quarter, reflecting a weaker Japanese yen versus the U.S. dollar, and increased 4 percent to US$639 million, or 17 percent of worldwide sales, in the full year. However, on a constant-exchange rate basis, total sales rose 2 percent in the quarter and 6 percent in the full year; on that basis, comparable store sales rose 2 percent and 7 percent in the quarter and full year.

In Europe, total sales increased 3 percent to US$146 million in the fourth quarter due to mixed performances by country and also rose 3 percent to US$432 million, or 11 percent of worldwide sales, in the full year. On a constant-exchange-rate basis, total sales increased 3 percent and 7 percent in the quarter and full year and comparable store sales were unchanged in the quarter and rose 2 percent in the full year.

Other sales nearly doubled to US$24 million in the fourth quarter and rose 41 percent to US$73 million in the full year. The strong growth in both periods reflected the conversion in July of five Tiffany & Co. stores in the United Arab Emirates from independently-operated distribution to company-operated retail stores.

Tiffany added 28 company-operated stores in the full year: 13 in the Americas with four in the U.S., six in Canada (including four department-store boutiques in Canada that were converted to Company-operated locations), two in Mexico and one in Brazil; eight in Asia-Pacific including six in China, one in Australia and one in Singapore; two in Europe including one in France and one in the Czech Republic; and the five stores in the U.A.E. At January 31, 2013, the Company operated 275 stores (115 in the Americas, 66 in Asia-Pacific, 55 in Japan, 34 in Europe and five in the U.A.E.), compared with 247 stores (102 in the Americas, 58 in Asia-Pacific, 55 in Japan and 32 in Europe) a year ago.

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