Shares of Tiffany & Co. hit an all-time high Wednesday, with the retailer noting that foreign tourists are returning to its Big Apple flagship.
The swanky jeweler delivered better-than-expected quarterly results, saying increased spending by shoppers from overseas helped fuel a whopping 9 percent boost in comparable sales in the US.
For Tiffany, it was the first time foreign tourists have been a tailwind since the third quarter of 2016, according to public filings. Last week, Macy’s said foreign shoppers and the “significant improvements in international tourism” contributed to one of its best quarters in a couple of years.
“Foreign tourism will be a positive theme throughout the first quarter” for US retailers, said Instinet analyst Simeon Siegel, who noted that Tiffany said tourism was flat in the fourth quarter.
The jeweler’s shares were recently up 16 percent at $118.70 as the company’s first-quarter results beat Wall Street’s estimates, boosted by solid sales in the US and in Asia.
Tiffany said it also showed progress in a turnaround plan to keep millennial shoppers from drifting to stores and websites of newer players such as Denmark’s Pandora and online jeweler Blue Nile.
Tiffany’s plan included selling cheaper-priced items as well as everyday home items such as paper clips, pocket diaries, mirrors and wine openers to appeal to a wider customer base.
“New product offerings resonated with consumers, and with its paper flowers collection of platinum and diamonds jewelry rolling out, Tiffany should continue to fare well,” said Ken Perkins, founder of research firm Retail Metrics.
The company’s sales in the Americas, its biggest market, rose 9 percent and Asia-Pacific 28 percent in the three months ended April 30.
Overall same-store rose 7 percent on a constant currency basis. Analysts on average had expected an increase of 2.7 percent.
The company also said its gross margins for the quarter rose 63 percent, compared with a 62.1 percent rise a year ago.
Tiffany now expects earnings per share of $4.50 to $4.70 for the year ending January 2019, compared with the prior forecast of $4.25 to $4.45 per share.
“Global economic growth remains solid and should continue to benefit Tiffany’s high-end consumer. We expect Tiffany to post strong results throughout 2018,” Perkins said.
First-quarter net sales rose 14.8 percent to $1.03 billion, topping analysts’ estimates of $959.4 million, according to Thomson Reuters I/B/E/S.
Excluding one-time items, the company earned $1.14 per share, while Wall Street analysts had expected 83 cents per share.
Tiffany also announced a new $1 billion stock buyback program.
With Reuters