Tiffany's Profits Up 53%

The jewelry retailer earned $50.6 million, or 35 cents a share, in the quarter ending July 31, up from $33.1 million, or 22 cents a share, last year, marking its third quarterly gain in a row.

The strong increase in profits for the quarter, helped by the retailer's decision to raise diamond and platinum prices at the end of the first quarter to offset rising costs, prompted the company to boost its profit guidance for the year. The international gem seller, which operates more than 100 stores, now expects earnings of $1.55 to $1.65 a share, up from a previous estimate of $1.45 to $1.55, widely surpassing Wall Street estimates of 24 cents per share for the year.

The company's profits included $6.5 million, or 5 cents per share, from tax benefits related to the American Jobs Creation Act of 2004, which reduced the effective tax rate for the quarter. The Jobs Act helped the company's effective tax rate fall to 27% in the quarter, down 3% from a year earlier, the company said.

"These quarterly results are encouraging and we believe well-position Tiffany for a successful second half," the company said in a statement following the release of its second quarter numbers.

Sales of $526.7 million were up 11% from $476.6 million for the same quarter a year earlier, helped by US and international shoppers who purchased 8% more jewelry at Tiffany's US stores and 12% more internationally, the company said.

Same-store sales for stores open more than a year were also up 6%, due largely to a decision by the company in April to raise jewelry prices in response to increased diamond and platinum costs.