Tiffany & Co has posted its profit for the third quarter. The earnings topped that of estimates from analysts. The company boosted its earnings forecast for the year as the stock market in the U.S. continues rising giving consumers who are wealthy, the confidence to purchase merchandise that is higher priced.
Net income for the quarter that ended on October 31 increased 50% to end at $94.6 million, which was equivalent to 73 cents per share. Last year’s same quarter was $63.2 million and 49 cents per share.
Analysts had projected 58 cents per share. On the announcement of earnings, shares of Tiffany were up 6.2% in trading.
Tiffany is the second biggest luxury jewelry retailer in the world. It is benefitting from the surge in stock prices and the increase in home values that have given wealthy shoppers the willingness to purchase their discretionary goods. The company has also helped itself through increases in prices and the falling costs of precious metals.
Profits per share that exclude some items will be between $3.65 and $3.75 for the year that ends on January 31, said Tiffany. That is up from a forecast given previously of between $3.50 and $3.60 per share. Analysts estimated that profits for the year would reach $3.62.
The lower costs for products and higher prices have widened the gross margin for Tiffany. The sales percentage left following a subtraction of cost of goods from 54.5% to 57% for last year also contributed. Analysts have estimated that it would be 55.1%.
Revenues were up by nearly 7% of end the quarter at $911.5 million, which topped projections of analyst of $889.1 million. In the Americas, stores open 13 months or longer had sales that were up 1%, which were bolstered by an increase in growth at their store on Fifth Avenue.
Tiffany has said that shoppers had been drawn by the expanding of the company’s jewelry designs, which includes the Atlas line that features Roman numerals, in addition, the continued growth in statement and fine jewelry, with strength particularly in its collection of yellow diamond.
Tiffany stock has increased by 41% in 2013, compared to a 26% increase for the S&P 500 Index.
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