Tiffany & Co. will open three stores in the United States over the next year and close one, executives announced during a conference call following the release of its financial results.
The three new U.S. stores will be located in Aventura, Fla.; the Miami Design District; and Newbury Street in Boston. It is closing the East Hampton, N.Y., store.
Over the last year, the company opened three U.S. stores—in Garden State Plaza, Paramus, N.J.; Cleveland; and New Orleans.
Overall, the legendary retailer’s earnings were hit hard by having to remit $473 million to Swatch after it lost an arbitration over the two parties’ failed watch venture in a Dutch tribunal. That fine transformed a possible $190 million profit in the fourth quarter into a $104 million loss. The company still managed $181 million in net earnings for fiscal 2013, but if it hadn’t lost the arbitration, that number would have totaled $481 million.
The award’s strong impact dampened what were otherwise generally favorable financials for the retailer. Worldwide net sales rose 5 percent in the fourth quarter and 6 percent in the year. Excluding the Swatch arbitration award, net earnings increased 6 percent in the fourth quarter and 15 percent in the year.
The Americas region scored particularly strong results, with sales rising 5 percent for the year. The company added that the region finished the year on a “stronger-than-expected” note, with comps rising 7 percent in the fourth quarter on a constant-exchange basis, which it attributed in part to enhanced visual merchandising.
“We are not ready to call the 7 percent comp increase in the quarter the beginning of a trend but are encouraged nonetheless,” said Mark Aaron, vice president of investor relations, on the call.
Not including its Fifth Avenue flagship, Tiffany’s three strongest branch stores in the United States are South Coast Plaza in Costa Mesa, Calif.; Union Square in San Francisco; and Michigan Avenue in Chicago.
In a statement, chairman and CEO Michael J. Kowalski singled out the retailer’s Atlas, Ziegfeld, and Harmony collections as strong performers. On the call, Aaron said it had seen good results from its yellow diamond collection, engagement jewelry, statement fine and solitaire pieces, and its Enchant and Victoria lines. He reported improved performance in gold jewelry, but continued softness in silver, particularly in the under $500 price point.
In related news, Tiffany has authorized a $300 million stock repurchase program that takes effect immediately and will expire on March 31, 2017.
“Based on Tiffany’s financial performance and our favorable long-term outlook for earnings and cash flow, we believe that share repurchases are an appropriate way to return a portion of excess capital to stockholders, as well as to mitigate the dilutive effect on earnings per share from stock-based compensation,” Kowalski said in a statement.
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