Tiffany & Co. (TIF:US), the world’s second-largest luxury jewelry retailer, posted second-quarter profit that topped analysts’ estimates and raised its earnings forecast for the year as higher prices boosted revenue.
Net income rose 16 percent to $124.1 million, or 96 cents a share, in the three months ended July 31, from $106.8 million, or 83 cents, a year earlier, the New York-based company said in a statement today. Analysts projected 85 cents, the average of 25 estimates compiled by Bloomberg.
Chief Executive Officer Michael Kowalski, who will step down in 2015, has been working to refresh the retailer by adding new designs, updating stores and changing management. Tiffany’s affluent customers, buoyed by the rising stock market, have continued spending even as the chain increased prices. The U.S. and Asia-Pacific, in particular, showed solid sales growth, the retailer said today.
“We have been encouraged by Tiffany’s strong performance in early 2014,” Robert Drbul, an analyst at Nomura Securities in New York, wrote in a note to clients before the results. “We expect Tiffany’s fall and winter selling will benefit from new collection debuts under recently appointed Design Director Francesca Amfitheatrof.”
Tiffany rose 3.3 percent to $104.15 at 7:08 a.m. in early trading in New York. Before today, the stock had climbed 8.6 percent this year, in line with the 8.2 percent gain in the Standard & Poor’s 500 Index, which closed above 2,000 for the first time yesterday.
Profit this year will be $4.20 to $4.30 a share, the retailer said, up from a previous forecast of as much as $4.25. Analysts estimate $4.28, on average.
Second-quarter revenue climbed 7.2 percent to $992.9 million, topping the average prediction of $987.8 million.
President Frederic Cumenal will take over the top job April 1, the company said last month. Kowalski will remain on the board as non-executive chairman.
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