Tiffany sales sparkle in key holiday season, but hefty charges leads to 4Q loss, glum outlook

NEW YORK, N.Y. – Tiffany & Co. posted a loss for its fiscal fourth quarter, dragged down by a hefty charge tied to an unfavourable arbitration ruling. But its sales improved during the critical holiday selling season.

Even without the charge, its adjusted earnings missed Wall Street expectations. Its forecast for this year also was short of expectations. Tiffany’s shares fell more than 3 per cent in Friday premarket trading.

For the three months ended Jan. 31, the luxury jewelry company — known for its little blue boxes — lost $103.6 million, or 81 cents per share. A year earlier it earned $179.6 million, or $1.40 per share.

Removing the charge of $2.27 per share for the unfavourable arbitration ruling, earnings were $1.47 per share. Analysts surveyed by FactSet expected higher earnings of $1.51 per share.

Tiffany’s stock declined $3.17, or 3.5 per cent, to $88 in premarket trading two hours before the market open.

Revenue climbed 5 per cent to $1.3 billion from $1.24 billion, led by strong sales of fine and statement jewelry as well as jewelry collections. That matched Wall Street’s expectations.

Sales increased in the Americas, Asia Pacific and Europe. Sales declined in Japan due to the weaker yen, but climbed on a constant exchange rate basis.

Sales at stores open at least a year, a key gauge of a retailer’s health, rose 6 per cent due to higher sales in all regions. This metric excludes results from stores recently opened or closed.

Full-year net income declined 56 per cent to $181.4 million, or $1.41 per share, from $416.2 million, or $3.25 per share, in the previous year. Adjusted earnings were $3.73 per share.

Annual revenue increased 6 per cent to $4.03 billion from $3.79 billion.

Sales at stores open at least a year climbed 6 per cent.

For fiscal 2014, the New York company anticipates earnings between $4.05 and $4.15 per share. Analysts predict $4.27 per share. The retailer foresees full-year worldwide sales rising by a high single-digit percentage rate on strength across all regions.

Tiffany also announced that its board approved the repurchase of up to $300 million of its common stock. The company’s prior repurchase program expired at the end of January. The new buyback will expire on March 31, 2017.