Source: courtesy Tiffany & Co.
Worldwide same-store sales rose 9%, including a jump of 7% in the Americas, 8% in Asia-Pacific, 4% in Europe and a whopping 21% in Japan.
Net sales rose 13% year-over-year and net profits were up 50% in the first quarter, and the company used the occasion to raise its guidance. Full-year EPS guidance has been lifted from a prior range of $4.05 to $4.15 to a new range of $4.15 to $4.25. The estimate is based on net sales rising in the high single-digits, opening 13 new stores and closing four others, and free cash flow of at least $400 million, among other assumptions.
The consensus full-year estimates call for EPS of $4.17 on revenues of $4.34 billion. For the second quarter the consensus estimates are EPS of $0.93 on revenues of $999.64 million. The forecast is based on several factors: a revenue increase in the high single-digits on a constant dollar basis, adding 13 company-operated stores and closing four others, higher operating earnings, capital spending of $270 million, free cash flow of at least $400 million and other items.
First-quarter gross margin rose from 56.2% to 58.2% year-over-year, and operating margins rose to 20.7%. This is good, but not as good as the 60.5% gross margin in the fourth quarter. Once again Tiffany was able to increase prices and maintain sales leverage on fixed costs due to the strong increase in worldwide net sales.
The CEO did some bragging:
This is an excellent and encouraging start to the year. We were pleased with the strong and broad-based sales growth across most regions and product categories and our ability to leverage those improved sales into very significant growth in operating and net earnings.
Shares were up about 6% in premarket trading, at $93.45 in a 52-week range of $70.70 to $94.88. Thomson Reuters had a consensus analyst price target of around $98.90 before these results were announced.
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