October 1, 2020

Tiffany Reports 30% Drop in Third-Quarter Income

The jewelry company’s results missed Wall Street’s expectations, and it cut its full-year earnings forecast. Its shares dropped 6.2 percent.

For the quarter ended Oct. 31, Tiffany earned $63.2 million, or 49 cents a share, compared with $89.7 million, or 70 cents a share, a year earlier. Analysts polled by FactSet had forecast earnings of 63 cents a share.

Tiffany’s chairman and chief executive, Michael J. Kowalski, said in a statement that the company had expected its quarterly results would be affected by continuing economic softness and comparisons with the year-earlier quarter. But he added that the retailer’s gross margin rate of 54.4 percent — down from 57.9 percent in the prior-year period — was weaker than expected and its tax rate was higher than expected. Gross margin, a key performance metric, is the amount of each dollar in revenue a company actually keeps.

While cautious about worldwide economic conditions, Mr. Kowalski said the company anticipated that its results would improve during the holiday season, partly because of easier year-over-year sales comparisons but also because of new stores and new products.

The holiday season is critical for retailers, as it can make up to 40 percent of stores’ annual revenue.

Tiffany’s revenue increased 4 percent, to $852.7 million, in the third quarter, from $821.8 million a year earlier. Wall Street had expected revenue of $858.8 million in the latest period.

Tiffany now expects 2012 earnings of $3.20 to $3.40 a share. Its prior outlook was for earnings of $3.55 to $3.70 a share. Analysts are predicting earnings of $3.59 a share.

Tiffany shares dropped $3.93, or 6 percent, to close at $59.80.

Article source: http://www.nytimes.com/2012/11/30/business/tiffany-reports-30-drop-in-third-quarter-income.html?partner=rss&emc=rss