Tiffany & Co' s second-quarter profit beats views, but revenue misses

Tiffany & Co. rallied in pre-market trade after the luxury jeweller’s second-quarter profit came in ahead of expectations.

In the quarter to the end of July, earnings rose to $105.7m, or 84 cents a share, from $104.9m, or 81 cents a share the year before.

Meanwhile, revenue declined to $931.6m from $990.5m as strength in the dollar hit sales outside the US.

Analysts had been expecting earnings of 72 cents a share and sales of $933m.

Same-store sales at the retailer were down 8%, missing expectations of a 7.8% drop and in the red for the seventh quarter in a row.

Chief executive officer Frederic Cumenal said: “The global environment continues to reflect well known challenges that we believe have had broad effects on spending by local customers, as well as foreign tourists, especially from China.

“We are managing expenses efficiently, but also maintaining our marketing spending as a percentage of sales and continuing to invest in key strategic initiatives and opportunities to further strengthen Tiffany's competitive position among global luxury brands. By delivering extraordinary products and experiences to our customers around the world, we remain focused on growing sales, operating margins and earnings, and creating greater value for stockholders."

The company maintained its full-year 2016 outlook, saying it continues to expect worldwide net sales to decline by a low single-digit percentage from the prior year and for earnings per diluted share to drop by a mid single-digit from 2015’s adjusted earnings of $3.83 per diluted share.

Tiffany shares were up 4.5% in pre-market trade to $68.87.