Tiffany Earnings Fall Despite Better Sales
March 24, 13In the fourth quarter ended January 31, Tiffany's sales totaled $1.2 billion and net earnings increased 1 percent to $180 million.
For the entire year, net sales increased to $3.8 billion. Net earnings declined 5 percent to $416 million. Net earnings in fiscal 2011 had included $26 million for nonrecurring items related to the relocation of Tiffany's
Gross margins of 59.1 percent in the fourth quarter and 57 percent in the full year were below margins of 60.4 percent and 59 percent in the respective prior-year periods.
Tiffany said the declines largely reflected pressures from precious metal and diamond costs; a shift in sales mix toward higher-priced, lower margin products; and reduced sales leverage on fixed costs.
Expenses increased to $54 million in the full year compared with $43 million in fiscal 2011.
However, a slow
Conversely, in the Asia-Pacific region, total sales rose 13 percent to $254 million in the fourth quarter and 8 percent to $810 million, or 21 percent of worldwide sales, in the full year.
Total sales in
Tiffany expects an improvement in sales and earnings in the current year: global sales growth of 6 -8 percent, including a sales growth in the mid-teens percentage in Asia-Pacific and a low-single-digit increase in
Net earnings are projected to increase 6-9 percent during the year, however in the first quarter Tiffany expects them to decline approximately 15 -20 percent due to gross margin pressure and higher marketing-related costs.