While food and consumable retailers are struggling to pass along price increases and grow same stores sales, luxury retailer Tiffany is having little difficulty with either metric.
The company was able to increase prices, further expand its already huge gross margins and grow same store sales in the Americas by 8% during its second quarter ended July 31. Tiffany said worldwide sales increased 7% to $993 million and same store sales increased 3%. Gross margins increased to 59.9% of sales from 57.5% the prior year. Profits increased 16% to $124 million, or 96 cents and share, compared to $107 million, or 83 cents a share.
“These healthy second quarter results reflected solid sales growth in our stores, particularly in the Americas and Asia-Pacific regions,” said Tiffany chairman and CEO Michael Kowalski. “In addition, an improved gross margin was an important contributor to the earnings growth. We were also pleased with solid performance across most product categories, ranging from the success of perennial classics in fine, statement and engagement jewelry to our newest Atlas collection, and we are excited about the current debut of our new Tiffany T jewelry collection.”
The company experience strength in the Americas where total sales increased 9% in the second quarter to $484 million. The company’s second largest geographic area, Asia-Pacific, saw sales on a constant currency basis increase 13% to $237 million.
The better than expected performance prompted the company to increase is full year profit plan by five cents to a range of $4.20 to $4.30 from earlier guidance of $4.15 to $4.25.
Tiffany ended the quarter with a 293 stores worldwide consisting of 122 units in the Americas, 72 in Asia-Pacific, 55 in Japan, 38 in Europe, five in the United Arab Emirates and one location in Russia.