Tiffany & Co. has shown a boost in its full year earnings forecast after it posted a 16 percent increase in second quarter profits on Tuesday. The company credited the increase on strong Chinese sales that offset sluggish sales in the U.S. During morning trading, the upscale jewelry chain saw its shares increase by 1 percent.
The performance announcement from Tiffany was a positive touch among several disappointing reports that have been released during the last few weeks. The sluggish reports have left many concerned that people are not willing to spend money yet, even those who are more affluent, as the winter holiday season is quickly approaching. Many companies have lowered their earnings expectations for the rest of the year.
Saks Inc., Ralph Lauren Corp., and Coach Inc. are among the upscale retailers that reported weaker sales during the spring and early summer. Tiffany, which is considered the luxury market’s bellwether, gives hopes that the shoppers are indeed spending. The company, which is known for its blue boxes has earned $106.8 million, or 83 cents per share, for the period that ended on July 31. The year before the earning was 72 cents per share.
With revenue increasing from $886.6 million to $925.9 million, or 4 percent, the company was helped by strong performances from its statement and its fine jewelry products. According to Tiffany, statement jewelry are pieces that are priced higher than $50,000. The earnings that were predicted by analysts were 74 cents per share lower than the actual earnings.
In morning trading, Tiffany shares gained $1.04 reaching to $82.71. Asia-Pacific sales climbed some 20 percent, which was the result of strong sales in China. In Europe, sales rose 11 percent and were buoyed by strength in the U.K. and most of continental Europe. The weaker yen brought down sales by 14 percent in Japan.
Sales were up by 2 percent in the Americas, with the flagship store in New York leading the way. An increase in the average price per jewelry items sold was the reason for the increase. According to reports, the revenue at stores opened for a year or longer in the Americas remained unchanged for the quarter. It was in line with expectations. The fiscal 2013 earnings are now expected to be in a range of $3.50 to $3.60 per share whereas it was previously believed to fall between $3.43 and $3.53 per share. Wall Street has an expectation of earnings to be $3.54 per share.
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