Qatar-backed Tiffany & Co Q1 sales up 8%

Results reflected better than expected jewellery sales in the US and Japan
Qatar-backed Tiffany & Co Q1 sales up 8%
By Staff writer
Wed 29 May 2013 10:51 AM

Tiffany & Co, the luxury jeweller part-owned by Qatar’s sovereign wealth fund, reported its first-quarter sales topped expectations, boosted by improved demand for upscale jewellery especially in the United States and Japan.

Comparable-store sales, which exclude stores opened in the last year, rose 8 percent, a marked improvement over the holiday-season quarter, when results were flat, it said on Tuesday.

Tiffany executives, however, warned investors not to read too much into the good start to the year, pointing to lingering weakness in the Americas, a drop in the yen, which is hurting its profit, and ongoing poor results with less expensive jewellery, including silver.

Tiffany gets more than 30 percent of sales from jewellery costing less than $500, such as sterling silver heart pendants. In the first quarter, Tiffany sold fewer silver items.

In the Americas, sales advanced 6 percent, helped in part by much brisker business at its flagship Fifth Avenue store in Manhattan, where sales fell last year. The store generates about one-twelfth of companywide revenue.

In China, where Tiffany is opening four new stores this year and will have 26 by year end, sales growth contributed to a 14 percent gain for the Asia business.

In Japan, its second biggest market, sales were up 2 percent, and would have jumped 20 percent, if not for the impact of the yen's depreciation. Demand for expensive jewellery was a standout and the company credited government efforts to spur consumption.

Tiffany's quarterly results echoed recent reports by Saks and Coach in the United States, and Burberry Group and Italian fashion house Giorgio Armani, indicating luxury sales were regaining momentum.

For the quarter ended April 30, Tiffany reported that overall revenue rose 9.3 percent to $895.4 million, well above Wall Street expectations of $855.1 million, according to Reuters.

The Qatar Investment Authority (QIA) is the single largest shareholder in Tiffany and earlier this year it increased its stake to 8.7 percent.

* With Reuters

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