Tiffany Posts 4Q Loss, Due to Large Charge

Tiffany & Co. posted a loss for its fiscal fourth quarter, dragged down by a hefty charge tied to an unfavorable arbitration ruling. But its sales improved during the critical year-end selling season.

Even without the charge, its adjusted earnings missed Wall Street expectations. Its forecast for this year also fell short of expectations.

For the three- month period  ending 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 unfavorable 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 percent, to $88 in premarket trading, two hours before the market open.

Revenue climbed 5 percent 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 percent, due to higher sales in all regions. This metric excludes results from stores recently opened or closed.

Full-year net income declined 56 percent 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 percent to $4.03 billion from $3.79 billion.

Sales at stores open at least a year climbed 6 percent.

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 had 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.

This article appeared in print in the March 24th, 2014 edition of Hamodia.