Premium jeweller Tiffany & Co has lifted its full year profit and sales guidance after a bumper first quarter that has buoyed market confidence in new chief executive Alessandro Bogliolo’s turnaround plan.
Tiffany shares were up more than 23 per cent in the US overnight after the business reported a 15 per cent increase in global net sales to $1 billion for the three months ended 30 April.
Asia Pacific emerged as the company’s strongest region amid continued efforts to revamp product and invest in online to attract younger customers around the world.
Bogliolo, who unveiled a six-point turnaround in March, said growth had been achieved alongside sustainable increases in operating margins.
“We are very pleased with this start to the fiscal year, and we are particularly encouraged by the breadth of sales growth across most regions and all product categories,” he said.
Asia Pacific posted a 28 per cent increase in top line sales to US$329 million and comparable sales growth of 14 per cent, led by momentum in Greater China.
The Americas, Tiffany’s largest region, posted a nine per cent increase in revenue to US425 million, while comparable sales also increased nine per cent.
European sales were up 13 per cent to $107 million, growing two per cent on a comparable basis. Although on a constant exchange basis comp sales were down nine per cent, attributed to widespread softness across the region.
Gross margin was up by 0.9 per cent to 63 per cent, reflecting fractionalisation of fixed costs and a reduction in wholesale diamond sales.
Bogliolo also unveiled a new product collection of platinum and diamonds called Paper Flowers in the US on Wednesday and signalled a string of other launches in the coming months as the business moves forwards with efforts to revamp its range.
Tiffany now expects worldwide net sales to increase by a “high single digit percentage” in fiscal 18 and net earnings to increase between $4.50 and $4.70 per diluted share.
Those forecasts assume “mid-to-high” single digit comparable sales growth across all regions and a two per cent increase in global retail square footage on the back of eight store openings, two closings and around 15 relocations.
Tiffany opened one store in the first quarter and closed two. It operated 314 stores worldwide as at 30 April, versus 310 stores a year ago.