Tiffany & Co.(NYSE:TIF) reported its second quarter financial results ended July 31, 2016 on Thursday. The company reported unexpected rise in profits, while sales of the second quarter missed analysts’ estimates.
According to the statement, net income in the second quarter reached $105.7 million, or $0.84 per share, rising from $104.9 million, or $0.81 per share in the same period last year. The profits results beat analysts’ previous expectation of dropping to $89.8 million, or $0.72 per share. The increase in profits was partly due to the higher price and lower raw material costs in the second quarter.
However, Tiffany’s net sales decreased 5.9% to $931.6 million in the second quarter ended July 31, 2016, which was below estimates of $937.74 million. As for sales at Tiffany’s stores for over one year also dropped 8%, which was more than analysts’ estimates of dropping 6.9%. Comparable-store sales dropped 9%, not considering the influence of currency fluctuations. The company also mentioned that sales in United Kingdom was much better than those in continental Europe, where sales suffered form weak demand of consumers.
In addition, SG&A expenses in the second quarter dropped 4%, and decreased 2% excluding the effect of a specific charge in the prior year period, according to the statement.
Base on the financial results in the second quarter, the company maintained its outlook for full 2016 fiscal year. The company expected that the worldwide net sale for 2016 to decline by a low single-digit and earnings per diluted share to drop by a mid-single-digit percentage.
“The global environment continues to reflect well known challenges that we believe have had broad effects on spending by local customers, as well as foreign tourists, especially from China,” Frederic Cumenal, the Chief Executive Officer of Tiffany, said in a statement on Thursday. “We are managing expenses efficiently.”
Shares of Tiffany rose 7.20% to $73.83 per share in midday trading Thursday.