After failing to impress last quarter, upscale jeweler Tiffany & Co. (TIF, Financial) reported strong first-quarter earnings before the opening bell on Wednesday.
The New York-based company posted adjusted earnings per share of $1.14, topping Thomson Reuters’ estimates of 83 cents.
Revenue grew nearly 15% from the prior-year quarter to $1.03 billion, beating expectations of $959.4 million. The company attributed its performance to strong demand in the Americas, its biggest market, and Asia-Pacific regions. Each region saw sales grow 9% and 28% respectively as new products caught the eye of millennial shoppers.
In an effort to revive its languishing sales and attract new shoppers, Tiffany has introduced cheaper-priced jewelry as well as everyday home items like paper clips, mirrors and wine openers. It also recently launched a new line of platinum and diamond jewelry, called Paper Flowers, and introduced its “Believe in Dreams” campaign, in which actress Elle Fanning dons some of the brand’s most iconic jewelry while paying tribute to Audrey Hepburn’s performance in “Breakfast at Tiffany’s.”
Tiffany CEO Alessandro Bogliolo, who stepped into the role last October, said he is pleased with the company’s start to the year and is “encouraged by the breadth of sales growth.”
“Most importantly, however, we remain focused on achieving sustainable growth in comparable sales, operating margin and earnings by pursuing and investing in the six strategic priorities we put forward in March: Amplifying an evolved brand message; Renewing our product offerings and enhancing in-store presentation; Delivering an exciting omnichannel customer experience; Strengthening our competitive position and leading in key markets; Cultivating a more efficient operating model; and Inspiring an aligned and agile organization to win,” he said.
Tiffany’s overall same-store sales grew 7% on a constant currency basis, surpassing projections of a 2.7% increase. Gross margins for the quarter climbed 63%, compared to a 62.1% increase a year ago.
As a result of its performance, Tiffany raised its full-year 2018 earnings outlook to between $4.50 and $4.70 per share. The previous guidance was $4.25 to $4.45 per share.
The company also announced a new $1 billion stock buyback program.
Following the announcement, Tiffany’s shares soared nearly 14% in premarket trading to a record high of $116.76. According to GuruFocus, the stock has gained approximately 12% year to date.
Disclosure: No positions.
