Tiffany & Co.’s strong net sales growth in Asia-Pacific and Europe led to an 11 percent increase in its worldwide net sales in the second quarter 2008 ending July 31 compared to one year ago, IdexOnline reports. Combined with a higher operating margin, this resulted in a 21 percent increase in net earnings and a 31 percent increase in earnings per diluted share.
Net sales in the second quarter 2008 increased to $732.4 million. On a constant-exchange-rate basis, net sales rose 7 percent and same-store sales declined 1 percent.
In February- July, Tiffany’s net sales rose to $1.4 billion or up 11 percent to the last year. On a constant-exchange-rate basis, sales in the reported period increased 7 percent and same-store sales rose 1 percent against the last year results.
Sales in the Americas region increased 3 percent to $422.4 million in the second quarter 2008 and 4 percent to $796 million in the first half 2008 largely due to newly opened stores. In the U.S., same-store sales declined 4 percent in the second quarter and 2 percent in the first half 2008. In the respective periods, sales in the New York flagship store rose 5 percent and 10 percent reflecting increased spending by non-U.S. visitors. Internet and catalog sales declined 4 percent in the second quarter and 2 percent in the first half.
Sales in the Asia-Pacific region increased 17 percent to $214.2 million in the second quarter and 19 percent to $436.3 million in the first half. Same-store sales rose 1 percent and 2 percent in the respective periods. Strong growth in most countries was partly offset by results in Japan.
Sales in Europe in the second quarter increased to $71 million (35 percent) and to $131.1 million (36 percent) in the first half. On a constant-exchange-rate basis, sales rose 29 percent and 30 percent in the respective periods due to same-store sales growth of 11 percent and 12 percent.
Chairman and chief executive officer Michael Kowalski says, “Tiffany’s global retail operations once again demonstrated the ability to generate strong operating earnings growth despite weakness in certain individual country markets. Our continued expansion throughout Asia and Europe should contribute to increasingly consistent and resilient long-term earnings growth.”
The Richemont Group reported its sales increased 10 percent to $7.688 for the year ending March 31, 2008. The strongest growth during the period came from the group’s Jewelry Maisons Cartier and Van Cleef & Arpels where combined sales at actual exchange rates increased by 13 percent over the five-month period. Sales of high jewellery pieces during the period were particularly strong. In the quarter ending June, 30 combined sales of the two companies were up 13 percent at actual exchange rate and 20 percent at constant exchange rate. During the five months, from April to August, sales were still growing steadily though at a lower rate. The five-month combined sales in all the group’s business segments increased 11 percent at actual exchange rate and 18 percent at constant exchange rate.
“From a geographic perspective we have seen good growth in many of our markets. At actual exchange rates, sales in Europe increased by 17 per cent and in the Asia-Pacific region by 19 per cent. Those increases were partly offset by an 8 per cent decrease in Japan. European sales were particularly strong in France, the U.K. and Switzerland, which benefited from strong tourist traffic from emerging market economies. Sales in the Americas were at the same level as last year, largely due to exchange rate effects. Underlying sales in local currency terms grew by 14 per cent during the five month period. The American market is beginning to show some signs of a slowdown, which is to be expected given the difficulties that the economy is facing,” Richemont Executive Chairman Johann Rupert says.
Nevertheless, he warns that the impact of the global financial crisis, the high rates of inflation and high commodity prices is difficult to predict. Products and brands positioned at the entry and mid-market price points in the luxury goods industry are experiencing difficult market conditions. However, the top end of the luxury market - where Richemont’s Maisons are predominantly positioned - has not been affected.
“That is not to say that Richemont is immune from a slowdown but we do believe that we are better placed than many to weather difficult times ahead. The talents embodied in our Maisons, coupled with Richemont’s strong balance sheet with no net debt, even once the recently announced restructuring is completed, give me the confidence to say that, whatever may lie ahead in the short term, Richemont will continue to prosper and grow over the long term,” Rupert predicts.
Polished diamond manufacturer Lazare Kaplan International (LKI) shifted to a net profit of $7 million for the fiscal year ended May 2008. LKI’s financial results showed a loss of $200,000 the year before. Its profit rise occurred on the background of lower sales.
Net sales for the fiscal year ended May 31, 2008 reached $369.7 million ($94.4 million for fourth quarter) versus $434.4 million and $96.9 million for the comparable prior year periods. LKI noted that the decrease in sales reflects a reduction in sales from rough diamond trading operations offset in part by increased polished sales of both branded and fine cut commercial diamonds.
The company, a DTC sight holder, expects that the slowdown in U.S. economic activity, the world credit crunch and more conservative consumer spending will seriously affect the diamond and diamond jewelry business in coming months.
“Though new markets have opened in other parts of the world, the U.S. remains the major demand driver, and we anticipate that the international markets will also be affected by the economic slowdown. Thus, a cautionary note is in order at this time,” LKI said in its official statement.
The company was late in publishing the earnings results for the past year.
