* Shares up as much as 4.5 pct at $94.00
* Sales of under $500, gold jewelry rise
* Q4 adj. profit $1.45/shr vs. est. $1.38/shr
(Adds details, analyst comment)
By Sruthi Ramakrishnan
March 17 Tiffany & Co's
higher-than-expected quarterly results suggested that the luxury
retailer's push in to higher-margin fashion jewelry and
affordable products was helping it win back customers.
Shares of the luxury retailer, whose sales also beat
estimates, rose to a 19-month high in afternoon trading on
Tiffany has been struggling to lift sales, particularly in
the Americas - its biggest market - as shoppers spend lesser on
accessories and shift to cheaper, chic brands.
The jeweler removed Chief Executive Frederic Cumenal last
month and days later struck a surprise deal with activist
investor Jana Partners to add three directors to its board.
Tiffany sold more fashion jewelry in the fourth quarter
ended Jan. 31, driven by demand for gold jewelry and items from
its "Tiffany T" collection. The company has been rapidly
introducing new items in this category.
"The fashion category is where we have enjoyed the most
relative success, so I think that speaks at least directionally
of some success in appealing to millennials," Tiffany's Chairman
and interim Chief Executive Michael Kowalski said on a
Sales of jewelry priced under $500 were also higher in the
quarter. The company plans to increase its offerings in the
category and is also banking on lifting "disappointing"
e-commerce sales, Kowalski added.
"We are encouraged on solid fundamental momentum and believe
TIF is making good strides," Cowen & Co analyst Oliver Chen said
in a client note.
JAPAN, CHINA SALES UP
Sales in Japan, which rose 15 percent to $185 million in the
fourth quarter, were bolstered by the brand exposure Tiffany got
through a popular television show last year, Kowalski said.
A strong yen also helped boost spending by Japanese tourists
in other regions.
Chinese consumers spent more locally than as tourists,
Kowalski added, leading to a 9 percent growth in Asia-Pacific
sales to $284 million.
However, Tiffany's Americas sales fell 3 percent to $587
million in the quarter ended Jan. 31, partly hurt by traffic
disruptions at its flagship store on Fifth Avenue in New York
due to its proximity to Trump Tower.
Net sales rose 1.3 percent to $1.23 billion, the second
straight rise in two years.
Excluding items, the company earned $1.45 per share.
Analysts on average had expected a profit of $1.38 per share
and revenue of $1.22 billion, according to Thomson Reuters
(Reporting by Jessica Kuruthukulangara and Sruthi Ramakrishnan
in Bengaluru; Editing by Martina D'Couto)