$1 Billion Increase in 2012 Swatch Group Sales

Swatch Group, the world’s leading supplier of finished watches and watch movements, said Thursday that annual gross sales for 2012 increased by $1 billion, year-over-year. Its 2012 gross sales totaled 8.143 billion Swiss francs ($8.88 billion), a 14 percent increase over 2011 gross sales.

The Swiss company said in a statement that its 2012 watch and jewelry gross sales increased 15.6 percent year-over-year, to nearly 7.3 billion Swiss francs ($7.96 billion), led by sales in China, with double-digit increases for all of its brands.

In the production segment of the company, capacity was expanded, resulting in improved performance. This led to a 10.1 percent increase in gross sales to 2.21 billion Swiss francs ($2.41 billion). Bottlenecks, which had been a problem in past years due to robust demand, were reduced in 2012, the company said.

Its electronics systems segment “is still exposed to a combination of strong price pressure and adverse exchange rates,” the company said. As a result, gross sales decreased by 7.4 percent in 2012 to 311 million Swiss francs ($339,373).

The Swatch Group brand, Omega, is the official timekeeper for the Olympics, which meant that the company had major marketing expenses during the 2012 London Summer Olympics. This along with “unsatisfactory currency developments” will hit projected operating profit and net income. However, the company said it still expects “good results.”

The company also said that the first 10 days of January saw strong sales, indicating “healthy growth” for 2013.

Based in Biel—the vertically integrated company with full manufacturing capabilities, branded retail outlets and alliances with other retailers throughout the world—owns and operates the following brands: Breguet, Blancpain, Glashütte Original, Jaquet Droz, Léon Hatot, Omega, Longines, Rado, Union Glashütte, Tissot, Calvin Klein Watches + Jewelry, Balmain, Certina, Mido, Hamilton, Swatch, Flik Flak, Endura and Tourbillon.

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Signet Annual Sales Up 9%

Kay Jewelers, owned by Signet Jewelers

Signet Jewelers Ltd., the largest specialty retail jeweler in the U.S. and the U.K., reported that for its 2012 fiscal year, same store sales increased 9 percent, compared to an increase of 6.7 percent in fiscal 2011. Total sales increased 9.1 percent for the year to nearly $3.75 billion, compared to an increase 5 percent increase in fiscal 2011. E-commerce sales rose 36.5 percent for the period ended January 28 to $92.3 million.

Income before income taxes for fiscal 2012 increased 67.1 percent to $502.1 million. Diluted earnings per share rose 60.8 percent to $3.73. The Signet board declared an increased quarterly dividend of $0.12 per share, up 20 percent.

Sales in the U.S., which accounts for 81 percent of total group sales, increased 10.6 percent to $3.03 billion. Sales n the U.K., which accounts for 19 percent of total group sales, increased 3.2 percent to $715,100 million.

Same store sales in the U.S. rose 11.1 percent for the year and rose a 0.9 percent in the U.K. for the same period.

Signet operates approximately 1,853 specialty retail jewelry stores, including 1,318 stores in the U.S., under the store brands Kay Jewelers, Jared The Galleria Of Jewelry and a number of regional names. The company operates approximately 535 stores in the U.K., under the store brands H.Samuel, Ernest Jones and Leslie Davis.

“Fiscal 2012 was another outstanding year for Signet, said Mike Barnes, Signet CEO. “The increased quarterly dividend of $0.12 per share demonstrates the confidence the Board has in the strength of our business model and our ability to generate positive cash flow, while continuing to invest in, and support, our long term growth initiatives. We are pleased with our sales for Valentine’s Day and believe that Signet is well positioned for Fiscal 2013.”

There was some softness in the fourth quarter for the Bermuda-based company, when compared to the strong growth in the prior three quarters. Total sales increased 6.6 percent to $1.35 billion, with U.S. stores accounting for $1.09 billion in sales and the U.K. representing $263,700. Same store sales increased 6.9 percent for the period ended January 28 (U.S. 8.3 percent; U.K. 1.7 percent).

Income before income taxes increased nearly 52 percent for the quarter to $242.4 million and diluted earnings per share rose nearly 48 percent to $1.79.

Signet said it repurchased $11.8 million of its common shares in the fourth quarter of Fiscal 2012. A total of $288.2 million remained available for future repurchases under the program.

Tiffany Q4 Sales up 12%, Full-Year Sales up 31%

Tiffany & Co. said Monday fourth quarter worldwide net sales increased 12 percent to $1.1 billion due to growth in all geographic regions. Net earnings from continuing operations for the period rose 31 percent to $181.2 million. For the full year, net sales rose 14 percent to $3.1 billion and net earnings from continuing operations increased 39 percent to $368.4 million. Management also reduced its outlook for the first quarter of 2011 because of the crisis in Japan, where nearly a quarter of its stores are located.

“These strong fourth quarter sales, which were better than the holiday results we had previously reported, were the culmination of an excellent year of strong earnings growth for Tiffany,” said Michael J. Kowalski, Tiffany chairman and CEO. “Our broad-based success reflected healthy comparable store sales growth and successful new store openings in the Americas, Asia-Pacific and Europe, and highly successful new product introductions including our extraordinary yellow diamond collection.”

Net sales highlights by segment for the fourth-quarter and year-end period ended January 31:

* In the Americas region, which includes the U.S., Canada and Latin/South America, sales in the fourth quarter increased 10 percent to $577.1 million and in the full year rose 12 percent to $1.575 billion (representing 51 percent of worldwide sales). On a constant-exchange-rate basis, sales increased 10 percent in the quarter and 11 percent in the full year and comparable store sales increased 8 percent and 8 percent (comparable Americas' branch store sales increased 9 percent and 8 percent and sales in the New York flagship store rose 2 percent and 6 percent). Combined Internet and catalog sales in the Americas increased 8 percent in both the quarter and full year.

* In Asia-Pacific, sales increased 25 percent to $188.3 million in the fourth quarter and 29 percent in the full year to $549.2 million (representing 18 percent of worldwide sales). On a constant-exchange-rate basis, sales rose 21 percent in the fourth quarter, due to strong growth in most countries, and rose 23 percent in the full year; on that basis, comparable store sales rose 16 percent and 14 percent.

* In Japan, sales increased 11 percent to $182.6 million in the fourth quarter and rose 7 percent in the full year to $546.5 million (representing 18 percent of worldwide sales). On a constant-exchange-rate basis, sales increased 2 percent in the quarter and declined 1 percent in the full year; on that basis, comparable retail store sales rose 1 percent and declined 4 percent.

* In Europe, sales increased 14 percent to $137.9 million in the fourth quarter and rose 18 percent in the full year to $360.8 million (representing 12 percent of worldwide sales). On a constant-exchange-rate basis, sales rose 21 percent in the quarter, due to strong growth in the U.K. and most of continental Europe, and increased 23 percent in the full year; on that basis, comparable store sales rose 16 percent and 18 percent.

* The luxury jeweler opened nine branded stores in the fourth quarter, and opened 15 in the full year including five stores in the Americas (Baltimore, Houston, Jacksonville, Los Angeles and Santa Monica), two in Europe (Barcelona and London), seven stores in Asia-Pacific (four in China: Beijing, Shanghai (2) and Kunming; and one each in Seoul, Singapore and Taipei) and one in Japan. The company also closed two locations in Japan. The Company operated 233 stores as of January 31 (96 in the Americas, 56 in Japan, 52 in Asia-Pacific and 29 in Europe).

* Other sales declined 30 percent to $15.3 million in the fourth quarter and increased 2 percent to $54.2 million in the year (2 percent of worldwide sales).  Declines in wholesale sales of rough diamonds were partly offset in the quarter and entirely offset in the year by increased wholesale sales of finished goods to independent distributors within emerging markets.

Gross margin (gross profit as a percentage of net sales) rose to 60.9 percent in the fourth quarter from 58.7 percent in the prior year, with the increase primarily reflecting the recapture of higher product costs through retail price increases, as well as manufacturing efficiencies and sales leverage on fixed costs, the company said. Gross margin in the full year rose to 59.1 percent from 56.5 percent in the prior year due to similar factors.

Kowalski said that the company plans to open 21 stores across the Americas, Europe and Asia-Pacific in 2011 and will introduce new products and expand marketing communications efforts.

Japan Crises
Kowalski made the following statement about Japan and how it may affect sales and earnings in 2011:

“We are saddened by the tragic events in Japan. Our thoughts are with our more than 700 Tiffany colleagues and with all the people of Japan. Tiffany stores located in the Kanto and Tohoku regions, which generate somewhat more than half of sales in Japan, were closed or operating on reduced hours after the earthquake and tsunami, with physical damage limited to a few stores. Most stores have re-opened over the past weekend. Our stores in the southwestern Kansai region have remained open.

In preparing our financial expectations for 2011, we have assumed some continued periodic store closings or limited store hours in Japan through the end of the first quarter, resulting in worldwide sales growth of 11 percent in the first quarter, with total Japan sales declining 15 percent. This leads us to now expect that earnings in the first quarter will be reduced by approximately $0.05 per diluted share from our initial expectation of $0.62 per diluted share to a new expectation of approximately $0.57 per diluted share (versus the prior year of $0.48). We cannot provide meaningful forecasts about sales in Japan beyond the first quarter and, therefore, have not adjusted our sales or earnings plan for the remaining quarters of 2011.”

Outlook for 2011
Tiffany said it expects worldwide net sales growth of 12 percent – 14 percent for the full year of 2011 (ending Jan. 31, 2012), adding that it was on track to exceed that expectation in the first quarter prior to March 11, when the crises in Japan begun. This figure is based on the following assumptions:

* A low-double-digit percentage increase in the Americas;

* A 20 percent increase in Asia-Pacific;

* A mid-single-digit percentage sales decline in Japan;

* Sales increasing more than 20 percent in Europe; and

* Other sales are expected to increase more than 30 percent.

Net earnings are expected to increase 14 percent to 18 percent for 2011.

Pandora Sales up Nearly 93%

Everyone’s favorite jewelry company, Pandora, reported a 92.6 percent sales increase to 6.67 billion Danish krones ($1.26 billion) for 2010. Net profit rose 86.2 percent to 1.87 billion Danish krones ($355.6 million) for the year.

By region, the Danish company that specializes in affordable charms reported stunningly strong sales growth. Its business in the Americas, its strongest market with 43.7 percent of total sales, grew by 87 percent. Europe, its second largest market with 43 percent of total sales, had the strongest growth for the year at 137 percent. Sales in the Asia Pacific grew by 28.3 percent and constituted 13.4 percent of total sales

Revenue from charms grew by 82.5 percent for the year and silver and gold charm bracelets revenue grew 50.3 percent. This past year the company was trying to strengthen sales in its rings and other jewelry and it has shown some good results. Ring sales grew by 281.8 percent and other jewelry grew by 185.2 percent. Together these two product groups represented 18.7 percent of revenue in 2010—up from 11.6 percent in 2009.

Gross margin was 70.9 percent, slightly below the gross margin of 71.4 percent in 2009, primarily due to increase in commodity prices not being entirely offset by price increases, the company said.

“2010 was a remarkable year in Pandora’s history, and I am both proud and very satisfied with the achievements we have accomplished together with our partners,” said Mikkel Vendelin Olesen, Pandora’s CEO. “While entering new markets that will contribute to our long-term development, we experienced strong growth in our existing markets and across all product categories. We increased branded sales and strengthened the awareness and perception of the Pandora brand among our target audience. And we successfully integrated new businesses into the group as well as new systems and procedures to prepare our organization for future growth. At the same time we listed the company on the stock exchange without losing momentum in our daily operations.”

For 2011, Pandora said it expects a revenue increase of no less than 25 percent.

At the end of 2010, PANDORA employed 4,985 people worldwide and sold its jewelry and other branded products through 10,618 points of sale in more than 55 countries on six continents.