New York-based jewelry and gifts cataloger/retailer Tiffany & Co. (NYSE: TIF) reported that its net sales increased 11% in the second quarter ended July 31. Net sales for the period reached $526.7 million, compared with $476.6 million last year. Direct marketing sales increased 5% to $30.4 million in the quarter, primarily due to increases in the average order in the catalog and Internet businesses.
U.S. retail sales increased 8% to $267.7 million. Comparable store sales rose 6% in the second quarter due to growth of 6% in comparable branch store sales and 3% in New York flagship store sales. Retail sales now include U.S. business gift sales, which had been reported in the direct marketing channel, though direct sales will include business gift sales transacted by e-commerce.
International retail sales increased 12% to $202.1 million in the second quarter. On a constant-exchange-rate basis, international retail sales rose 9% in the quarter. Other sales increased 43% to $26.5 million in the second quarter. These increases were largely due to sales of rough diamonds. (Such sales started in the third quarter of 2004 and will continue on a regular basis as a component of the company’s direct diamond sourcing initiatives.)
Earnings from operations increased 27% due to the sales growth and its leverage effect on selling, general and administrative expenses. Net earnings in the quarter increased 53% to $50.6 million, compared with $33.1 million last year.