Revamping the image of a 180-year-old company was never going to be easy, but new CEO Alessandro Bogliolo appears to be off to a good start.
Profits during the first quarter surged 53 percent, to $142.3 million. At $1.14 per share, the profit figures put up by the high-end Manhattan jeweler buried Wall Street projections for just 84 cents.
The company on Wednesday also said it would buy back up to $1 billion of its own stock, and shares soared by more than 19 percent in morning trading, to an all-time high.
“We are particularly encouraged by the breadth of sales growth across most regions and all product categories,” Bogliolo said in a prepared statement. “Most importantly, however, we remain focused on achieving sustainable growth in comparable sales, operating margin and earnings.”
Tiffany named Frederic Cumenal as CEO in 2015 to revitalize the Tiffany brand, but the company ran out of patience after only two years.
Late last year it brought in Bogliolo, who had been the top executive at Italy’s Diesel, hoping he could win over some of its younger shoppers.
He brought in quirkier designs including Tiffany’s “Paper Flowers” collection (more platinum and diamonds than paper to be sure). While the kinds of jewelry that made the store famous remain, industry watchers find the changes invigorating.
“The company is once again treating jewelry as an item of fashion and is putting itself at the forefront of trends and modern design,” wrote Neil Saunders, managing director of GlobalData Retail. “In our view, this is the breath of fresh air that will clear away Tiffany’s traditionally fusty image.”
Same-store sales, a key measure of a retailer’s health, jumped 7 percent. That’s more than double what was expected, with a surprising boost from the Americas.
Revenue surged 15 percent to $1.03 billion, also surprising analysts, and the company upped its full-year earnings forecast.
In the first quarter of the year, Tiffany’s sales in the Americas rose 9 percent, while sales in Asia rose 28 percent. Sales in Europe rose 13 percent, and 17 percent in Japan.
Tiffany expects full-year earnings to be $4.50 to $4.70 per share, up from prior guidance of $4.25 to $4.45.