Tiffany & Co beats by $0.11, reports revs in-line; raises FY15 EPS to in-line, reaffirms revs guidance
Reports Q2 (Jul) earnings of $0.96 per share, $0.11 better than the Capital IQ Consensus Estimate of $0.85; revenues rose 7.2% year/year to $992.93 mln vs the $988.94 mln consensus. The Americas comparable store sales were up 8%. Gross margin (gross profit as a percentage of net sales) increased to 59.9% in the second quarter from 57.5% year ago; operating margin (earnings from operations as a percentage of net sales) rose to 21.0% in the second quarter due to the higher gross margin.
- Co raises FY15 EPS to $4.20-4.30, prior $4.15-4.25, vs. $4.28 Capital IQ Consensus Estimate; reaffirms FY15 revs of +HSD vs. $4.39 bln Capital IQ Consensus Estimate.
- This full year forecast is based on the following assumptions:
- Opening 10 Company-operated stores and closing three existing stores: opening four in the Americas, two in Asia-Pacific, two in Japan, and one each in Europe and Russia, while closing one each in the Americas, Asia-Pacific and the U.A.E.
- Operating margin increasing due to a higher gross margin and SG&A expense growth less than sales growth.
- Interest and other expenses, net of $65 million; 6% increase in net inventories; Capital expenditures of $270 million, versus $221 million last year, with the increase largely reflecting incremental investments in certain information technology systems.
- Free cash flow (cash flow from operating activities less capital expenditures) of at least $400 million.