Tiffany Sees Higher 2008 Profit, Shares Rise
Tiffany gave a strong outlook for 2008 international sales Friday, sending its shares soaring more than 9 percent, despite the jeweler's cautious stand on its U.S. business for the first half.
Tiffany forecast international sales increasing in the mid-teens percentage range based on its expectations of mid-single-digit growth in same-store sales on a constant exchange rate basis.
The outlook, "combined with planned margin and expense levels, can generate low-double-digit net earnings per share growth for the year," Chief Executive Michael Kowalski said in a statement.
For fiscal 2008, which began on Feb. 1, Tiffany forecast net profit of $2.50 a share to $2.55 a share on overall sales growth of 10 percent.
Its 2008 plans come less than a month after Tiffany said same-store sales fell 2 percent at its U.S. stores in the key November and December holiday period, signaling an unwillingness among its domestic customers to spend freely.
At that time, it cut the top end of its profit forecast for fiscal 2007, and forecast earnings of $2.25 to $2.28 per share, excluding some one-time items.
The retailer said sales at its established U.S. stores rose only modestly in January from December as domestic shoppers remained reluctant to part with their discretionary dollars -- a sign that economic worries like rising food and fuel costs and a crumbling housing market are catching up with more consumers.
Tiffany has planned for a high-single-digit percentage rise in U.S. retail sales in fiscal 2008, reflecting a low-single-digit increase in same-store sales.
Tiffany shares were recently up 9.2 percent at $41.69, but below its year-high of $57.34 which was set on Oct. 11 2007.