- Tom Silva
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Tiffany & Company Earnings Report Shines
As well-known national retailers like Circuit City and Linens ‘n’ Things go out of business, one high-profile merchant saw its profits fall just one percent during the third quarter of 2009. Venerable Tiffany & Co. — renowned for its signature blue box – recently raised its year-end forecasts after reporting an uptick in domestic and foreign sales.
Tiffany’s – like the rest of the luxury retail sector – had seen its sales fall significantly during the recession as customers shied away from purchasing expensive jewelry. Now that the economy is starting a long and likely slow recovery, Tiffany’s quarterly performance is a positive sign. The firm earned $43.3 million, or 35 cents per share, for the quarter ending October 31, 2009. Revenues fell three percent to $598.2 million. The results clearly beat Wall Street expectations, which predicted a profit of 24 cents per share based on sales of $575.1 million.
Domestic sales are still down nine percent, with revenues at the flagship New York store down eight percent. Overseas results were more positive, with Asia-Pacific sales up 10 percent and European sales rising 12 percent.
The trend bears out a report by Bank of America/Merrill Lynch that luxury goods sales next year will increase by five percent with a spike of 13 percent in net profits expected. (Baum & Company is a little more cautious, predicting a one percent sales growth next year.) Part of the issue is cost cutting and efficiency by the retailers and part maybe renewed confidence because of the rebounding stock market – something that correlates closely with personal spending.