Tiffany & Co's second-quarter net income rose by 19 percent as the luxury jeweller's revenue rose as shoppers bought more of its products around the world, particularly in Asia and Europe. The chain raised its full-year earnings guidance to a range partly above analyst estimates, and CEO Michael Kowalski said the company looked forward to the second half "with a sense of guarded optimism."
Roughly half the company's revenue now comes from outside the U.S. Growth in the Asia-Pacific region, excluding Japan, was the company's strongest in the quarter as those economies continue to prosper. Sales of luxury items fell off around the world during the recession as shoppers limited their spending, even those at the highest income levels. But as the economy gradually recovers, sales have ticked up. The company has seen revenue grow in the third quarter at a low double-digit percentage from last year. A broad rebound in consumer spending - which, including big-ticket items like health care and housing, accounts for about 70 percent of the gross domestic product - will be critical to any economic recovery. And recovering luxury spending is seen as a harbinger.
In the three months ending July 31, the New York company earned $67.7 million, or 53 cents per share. That's above the $56.8 million, or 46 cents per share, the company earned in the year-ago period. Excluding one-time items, the company earned 55 cents per share - 2 cents above analyst estimates, according to Thomson Reuters.
Revenue rose 9 percent to $668.8 million, below analyst estimates of $690.2 million. Tiffany now expects net income to range from $2.60 to $2.65 per share this year, above its prior estimate of $2.55 to $2.60, which it had increased in May. Analysts expected $2.61.