NEW YORK, United States — Tiffany & Co. shares climbed in early trading as the jeweller’s move to enlist Lady Gaga to help revive sales may be working.
Earnings were 92 cents a share in the second quarter that ended last month, the company said Thursday. That topped analysts’ average 86 cent projection. Same-store sales in the US and Japan also exceeded estimates, helping send the shares up as much as 3 percent in early trading.
The results reflect Tiffany’s strategy to win back customers, including younger shoppers, by renovating stores and offering new designs, such as the HardWear collection promoted by the singer. Gaga was introduced as the new face of the jeweller in an ad that aired during the Super Bowl in February. The collection features bracelets, rings and earrings with dangle balls — items that may appeal to younger shoppers.
“One of the more promising areas of progress is the company’s attempts to better connect with younger consumers — a constituency with which it had lost traction,” said Neil Saunders, managing director of GlobalData Retail.
Shares of the company rose as high as $91.40 in premarket trading. The stock had gained 15 percent this year through Wednesday’s close.
Same-store sales missed estimates in Europe and the Asia-Pacific region, and while they were better than expected in the Americas, they still fell 1 percent there.
“It’s a decent quarter, it’s good enough to support the stock here,” said Brian Yarbrough, an analyst at Edward Jones & Co. “But across the board, the business remains difficult. At some point we really need to see some acceleration in comps or there’s going to be questions,” he said, referring to same-store sales.
The jeweller is betting Alessandro Bogliolo, who takes over as chief executive officer in early October, will further invigorate the brand.
The results follow an unexpected sales decline in the first quarter. Tiffany’s past results drew the attention of activist investor Jana Partners, which said the shares were undervalued. Another investor, CtW Investment Group, has been pushing for more diversity and younger directors on the jeweller’s ageing board.
Tiffany maintained its forecast for the full year, calling for sales to grow by a low single-digit percentage. Excluding some items, profit is expected to climb by a mid-single-digit percentage from $3.75 a share in the last fiscal year.
Growth in fashion and designer jewellery helped boost revenue to $959.7 million, while there was softness in other jewellery categories, the company said in a statement. Analysts had projected $930.4 million.
Tiffany is focused on innovating designs in jewellery and luxury accessories and making marketing more impactful to bolster the in-store and online experience for customers, interim chief executive officer Michael Kowalski said in a statement.
By Stephanie Wong; editors; Nick Turner, Lisa Wolfson, Jonathan Roeder.