Tiffany & Co 1Q13 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

” It’s safe to say that we are pleased to begin the year with better-than-expected sales and earnings. Sales growth of 9% in dollars or 13% on a constant-exchange-rate basis”

“solid performance in Japan, Asia-Pacific and Europe, but sales in the Americas were somewhat softer than we expected.”

“Gross margin, although below last year due to product sales mix, continued to benefit from diminishing product cost pressures, as well as price increases”

“there was mixed performance around the Americas region but pronounced softness in the Hawaii and Guam stores that reflected less Japanese tourist spending.”

“Without a doubt, Japan sales growth in the quarter exceeded expectations more than any other region. In local currency, total sales and comp store sales rose 20% and 21%, respectively, with considerable strength in engagement jewelry and other higher-price-point categories.”

“It’s worth noting that we took a price increase in Japan on April 10, which, beyond addressing product cost pressures, also included an adjustment for the yen’s weakness. Based on the customary pre-announcement of a price increase in Japan, it spurred purchasing in advance of the increase. However, we did not experience the typical expected slowdown after that. So while we believe a portion of the first quarter sales growth certainly reflects the strength of our brand, we also attribute the unusual strength to recent reports of a surge in household spending in Japan, likely tied to the Japanese government’s efforts to stimulate their economy.”

“We continue to see diverging demand among product categories by price point, with diamond jewelry clearly outperforming silver jewelry.”

“We finished the quarter with 275 company-operated stores. Our plan is to open 16 stores this year and close 1 store each in Japan and Taiwan, resulting in a net addition of 14 locations.”