Tiffany Beats Street; Zale Swings to Surprising Profit

Tiffany & Co. reported Q2 net income fell 10% to $37 million, or $0.26/share, hurt by a $0.17/share charge from the sale of its Little Switzerland business. EPS of $0.45 from continuing operations beat Street estimates of $0.34. Sales increased 19% to $662.6M, also topping estimates ($643.4M). Tiffany recorded robust 17% same-store-sales growth in the U.S. and 7% overseas. Full-year EPS (ex-items) is expected to be $2.64-$2.69 on 14% higher sales to $3.02B. Analysts had forecast $2.13/share on sales of $2.97B, on average. Tiffany said it expects a pre-tax gain of $104M, or $0.37/share, for the $328M sale of its Tokyo flagship store to Goldman Sachs (full story). Separately, Zale swung to a fiscal Q4 profit of $1.5M, or $0.03/share (breakeven on an adjusted basis) on slightly lower sales to $488M, compared to analyst expectations of -$0.13/share on sales of $483M. Tiffany's earnings call is at 8:30 a.m. and Zale's is at 9:00 a.m. (check later today for earnings call transcripts of Tiffany and Zale).

Sources: Press releases: TIF, ZLC, MarketWatch I, II
Commentary: Tiffany & Co.: Profits Wrapped in a Blue Box • Going Comparative Diamond Shopping: Blue Nile vs. Tiffany • Tiffany's Slump Presents Buy Opportunity
Stocks/ETFs to watch: TIF, ZLC

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Comments

[Ralph F]

Wonder how these companies will be impacted by rising diamond prices:
seekingalpha.com/artic...