Tiffany & Co. (TIF) matches analyst estimates for Q1


Tiffany First Quarter EarningsTiffany & Co. (NYSE: TIF) reported its first quarter results this morning, matching analyst estimates with 20 cents per share on lower sales. This marks a 60% drop year over year compared with the 50 cents per share that it earned during its first quarter of 2008.

As I noted in our earnings preview yesterday, the luxury jewelry retailer is facing some tough times. Consumers have been cutting back on spending, and this is being felt by all retailers. Tiffany has been no exception.

Despite the recent slowdown in consumer spending, Tiffany has decided that it is not going to sacrifice its brand reputation by lowering costs, and as a result, overall sales have been suffering.

Worldwide net sales in the quarter were off by 18%, which is about what we were expecting. In March, the company's CEO stated that he was seeing sales off by about 20% worldwide, so this figure really does not surprise us too much.

As with any retailer, a key figure we need to look at is same store sales. Since this measures sales at stores open at least 12 months, it is a good indication of just how strong a business is doing, and for the quarter Tiffany had a pretty poor 21% decline in same store sales. Once again, this was not unexpected, as we already knew that consumers had been cutting back on luxury purchases during the quarter.

The company continues to remain cautious about the economic landscape, but at the same time is trying very hard to convince investors that it is positioning itself as strongly as possible to deal with the current market place. According to the company's CEO, Michael J. Kowalski, "Tiffany is, and is projected to remain, solidly profitable and will generate substantial cash from operations."

Kowalski went on to add that he is seeing business in America starting to stabilize, and that Tiffany is standing by its full year guidance at this time. He expects that full year earnings will fall somewhere in the range of $1.50 to $1.60 per share.

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