Tiffany's, the iconic jeweler famous for its robin's egg blue boxes, reported a healthy fiscal fourth quarter this morning.
Earnings came in at $1.40 per share, which was higher than the $1.36 expected by analysts.
Strong sales were driven by Asian demand.
"In the Asia-Pacific region, total sales rose 13% to $254 million in the fourth quarter and 8% to $810 million, or 21% of worldwide sales, in the full year," wrote the company. "On a constant-exchange-rate basis, total sales rose 10% in the fourth quarter due to sales growth in Greater China and in other markets and rose 8% in the full year; on that basis, comparable store sales rose 6% in the quarter and 2% in the full year."
Management expects the current fiscal year to be another strong one.
"Worldwide net sales growth of 6%-8% in U.S dollars," they wrote. "On a constant-exchange-rate basis, an expected high-single-digit percentage increase in worldwide net sales includes sales growth in all regions, ranging from a mid-teens percentage increase in Asia-Pacific to a low-single-digit increase in Japan."
Tiffany's is likely to benefit from a recent scandal involving "impure gold" jewelry at unreliable Chinese vendors.
"On Friday evening (15 March), CCTV’s (China Central Television) “3.15 program” showed a segment on impure gold jewelry," wrote Morgan Stanley's Edward Lui. "An anonymous insider at an OEM described the mixing of iridium (IR) metal into pure gold jewelry to increase the weight and reduce the cost of gold jewelry (IR costs 10-20% as much as gold). Gold bracelets sold at various domestic jewelry retailers, including a well-known brand, “Chow Tai Seng”, were later found to contain IR and failed purity tests. No listed companies were mentioned."
Lui said well-known companies like Chow Tai Fook were likely to benefit. While Lui didn't identify Tiffany's specifically, the iconic jeweler is unlikely to be a loser in this.
More From Business Insider