Its boom time for the luxury market. As the economy revives, the high-end products market too seems to be on its way to making profits. Don’t believe us? Check the latest statement from luxury brand, Tiffany and Co. Reportedly, profits at Tiffany & Co more than quadrupled in the three months to January 31 while shares have doubled in the past year. Signaling a period of growth for all luxury jewelers, this growth in sales and shares of Tiffany & Co. is definitely great. On a constant-exchange-rate basis, sales rose 18 percent in the fourth quarter and 16 percent in the year; while like-for-like sales jumped 14 percent and 9 percent. The sales in Europe were the highest for the luxury brand and retailer rising up 29% to $122.9 million in the fourth quarter and 10% to $311.8 million.
The opening of two new stores on the European soil may have contributed to this increase in sales. Profits were also reported for Tiffany from the Far East as well as the US market with the New York store reporting 22 percent rise in sales.
However, despite this rise in sales, profit at the group was below analyst expectations at US$140.4 million and full-year sales dropped 5 percent. Tiffany reported lower gross margins, dragged down by increased wholesaling of rough diamonds which generate “minimal, if any profit” for the business. There was also an overall rise in Tiffany’s expenses courtesy management incentive compensations.
But with the gradual and steady growth in sales, Tiffany is sure to overcome all obstacles and show overall profits in the year 2010.