Tiffany’s 3Q sales jumps 21%

Tiffany & Co. said Tuesday its fiscal third quarter profit rose 63 percent on strong sales globally, mainly in Asia. However, good news did not reach the stock market as their forecast for fourth quarter fell below expectations. Consequently , its shares plumbed

 $4.82, or 6.6 percent, to $68.80 in premarket trading.

The New York company's net income rose to $89.7 million or 70 cents per share in the three months ended Oct. 31. That compares with $55.1 million, or 43 cents per share, a year ago. Analysts expected earnings of 60 cents per share, according to FactSet.

Despite revenue rose 21 percent to $821.8 million, analysts expected $801.8 million. "Increased sales in all regions contributed to the continuation of strong worldwide sales growth in the third quarter," said CEO Michael J. Kowalski, as published at the San Francisco Chronicle.

In the Americas, sales grew 17 percent to $387.7 million. Revenue in stores open at least one year rose 16 percent. Tourists became a big help to push the measure up 30 percent Tiffany's the New York flagship store. Meanwhile, in Asia-Pacific, revenue rose 44 percent to $183.2 million, helped by strength in the greater China region. Revenue rose 12 percent in Japan and 19 percent in Europe.

But the company said that in the fourth quarter, the company expects net income of $1.48 to $1.58 per share. Analysts expect $1.63 per share. Soon after their announcement, shares fell $4.82, or 6.6 percent, to $68.80 in premarket trading.

For the year, Tiffany expects earnings of $3.70 to $3.89 per share, for prior guidance of $3.65 to $3.75 per share. Analysts expect $3.72 per share. The company also expects revenue to rise in the high-teens percentage for the year.

Tiffany dropped 9.5 percent to $66.60 at 9:55 a.m. in New York, after earlier plunging as much as 13 percent for the biggest intraday decline since January 2008. The shares had gained 18 percent this year before today.

Gross margin, or the percentage of sales left after the cost of goods sold, shrank to 57.9 percent from 58.5 percent a year earlier. David Schick, an analyst with Stifel Nicolaus & Co. in Baltimore, had estimated 59 percent.

"The luxury consumer is slowing down as you might expect given the financial market turmoil," Schick said in a telephone interview. "There was a lot of momentum in sales in the third quarter and that has clearly slowed down."

Net income in the three months ended Oct. 31 climbed 63 percent to $89.7 million, or 70 cents a share, from $55.1 million, or 43 cents, a year earlier, Tiffany said. Analysts projected 61 cents, the average of estimates compiled by Bloomberg.

Angela González-Rodríguez