Tiffany said its net earnings from continuing operations increased 27% to $55.1 million, or 43 cents per share, versus $43.3 million, or 34 cents per share, last year. Adjusting for one-time expenses, Tiffany earned 46 cents per share, easily topping analysts' estimates of 37 cents per share.
Worldwide net sales increased 14% to $681.7 million, beating estimates of $652.8 million. On a constant-exchange-rate basis, worldwide net sales increased 12% and comparable-store sales (stores open at least a year) grew by 7%.
"We are quite pleased with the performance of new stores and recent product introductions, including the yellow diamond and leather goods collections," said Chairman and CEO Michael Kowalski.
Looking ahead, Kowalski added, "We are now a few weeks into the all-important two-month holiday season and sales growth is exceeding our expectations, although the majority of the holiday season is certainly still ahead of us. Based largely on having achieved higher-than-expected third quarter earnings, as well as favorable gross margin trends, we are increasing our annual net earnings outlook."
The company expects a worldwide sales increase of approximately 12%. As for earnings, the company raised net earnings guidance for the year to $2.72 to $2.77 per share, from the $2.60 to $2.65 range it guided previously. This was also above analyst expectations for full year earnings of $2.64 a share.
Tiffany's has a 4% share of the $29.6 billion jewelry store industry. This is about the same as Zales (ZLC), which reported a loss Tuesday, but less than Signet Group (SIG), which has an 8.5% share, according to market research firm IBISWorld. "IBISWorld expects a return to luxury shopping this holiday season, with jewelry sales up 6.1%," said senior retail analyst Toon van Beeck. "For this reason, Tiffany & Co. is forecasted to be one of the leading retailers in the fourth quarter."