Tiffany & Company
) posted fourth-quarter fiscal 2013 adjusted earnings of $1.47
per share that missed the Zacks Consensus Estimate of $1.52 but
increased 5% from $1.40 in the prior-year quarter benefiting from
higher sales and improved operating margin.
On a reported basis, including one-time items, the company
delivered loss of 81 cents a share compared with quarterly
earnings of $1.40 in the year-ago period. This designer,
manufacturer and retailer of fine jewelry also provided initial
earnings outlook for fiscal 2014 that came below analysts'
Shares of Tiffany tumbled 3.6% to $87.90 during
Let's Unveil the Picture
Tiffany posted net sales of $1,298.3 million during the
quarter, up 5% from the prior-year quarter, on the heels of
healthy performance of stores in the Americas, Asia-Pacific and
Europe regions and due to new collection launches. However, total
revenue fell short of the Zacks Consensus Estimate of $1,303
million. In constant currencies, net sales jumped 9%, whereas
comparable-store sales climbed 6%.
By geographic segment, sales in the Americas grew 6% to $659
million, while comps rose by an equivalent rate; sales in the
Asia-Pacific region climbed 8% to $275 million, whereas comps
increased 1%; sales in Japan declined 12% to $169 million and
comps dipped 11%; and sales in Europe jumped 10% to $161 million
and comps increased 5%. Other sales surged 47% to $35
In constant currencies, sales in the Americas rose 7%, whereas
comps grew by a similar rate during the quarter; sales in the
Asia-Pacific region grew 11%, whereas comps rose 4%; sales in
Japan advanced 8%, while comps also grew by 8%; and sales in
Europe climbed 7%, whereas comps rose 2%.
Gross profit for the quarter increased 7% to $785.6 million,
while gross margin expanded 140 basis points to 60.5% due to
lower product cost and increase in prices. Adjusted operating
income jumped 8% to $312.9 million, whereas operating margin
increased 60 basis points to 24.1%.
Tiffany opened net 14 outlets during fiscal 2013. The company
plans to add 13 stores - 4 in the Americas, 5 in Asia-Pacific, 2
in Japan, and 1 each in Europe and Russia, and has plans to
shutter 4 outlets - 1 each in the Americas, Asia-Pacific, Japan
and the U.A.E during fiscal 2014.
As of Jan 31, 2014, the company operated 289 stores (121 in
the Americas, 72 in Asia-Pacific, 54 in Japan, 37 in Europe and 5
in the U.A.E.).
Other Financial Details
Tiffany ended fiscal 2013 with cash and cash equivalents and
short-term investments of $367 million, and total short-term and
long-term debt of $1,003.5 million, reflecting 37% of
shareholders equity flat with the prior year. Management
forecasted capital expenditures of approximately $270 million and
expects to generate free cash flow of at least $400 million for
The company's Board of Directors also authorized a share
repurchase program of $300 million, which is slated to expire on
March 31, 2017.
Strolling Through Guidance
Tiffany now projects fiscal 2014 earnings between $4.05 and
$4.15 per share. The current Zacks Consensus Estimate for fiscal
2014 is $4.26 per share, which could witness a downward revision
in the coming days.
Tiffany now expects total net sales growth in high-single
digit percentage for fiscal 2014 both in U.S. dollars and in
constant currencies with growth across all regions.
Zacks Rank for Tiffany
Tiffany currently sports a Zacks Rank #3 (Hold). Other better
ranked retail stocks that look promising include
Michael Kors Holdings Ltd.
), all carrying a Zacks Rank #1 (Strong Buy).
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