NEW YORK - Tiffany & Co., the world’s second-largest luxury jewelry retailer, reported second-quarter profit that topped analysts’ estimates as price increases and declining product costs helped counter tepid sales in the Americas.
Net income in the quarter ended July 31 rose 16 percent to $106.8 million, or 83 cents a share, from $91.8 million, or 72 cents, a year earlier, the New York-based company said today in a statement. Analysts projected 74 cents, the average of 22 estimates compiled by Bloomberg.
Tiffany, which has seen a drop in costs of the precious materials it uses to make its jewelry, raised prices this year after holding them steady last year. Sales fell short of estimates amid a disappointing second quarter across the U.S. retail industry.
“It’s lower silver costs they are benefiting from,” Brian Yarbrough, an analyst with Edward Jones & Co. in St. Louis, said in a telephone interview Tuesday. “When they increased prices in the past they didn’t see push-back, and I think that continues: They don’t see the push-back.”
Gross margin, or earnings left after subtracting the cost of goods, came to 57.5 percent of sales compared with 56.3 percent a year earlier.