FINANCE

Tiffany Q2 profit and sales top estimates; to open 10 stores

BY Dan Berthiaume

New York – Profit and revenue for Tiffany & Co. exceeded Wall Street predictions during the second quarter of fiscal 2014. Net earnings rose 16% to $124 million from $107 million in the second quarter of the previous fiscal year, which the retailer attributed to worldwide net sales growth and gross margin improvements.

Worldwide net sales increased 7% to $992.9 million, from $925.9 million. Strong performance in the colored diamond and statement jewelry categories helped drive sales.

During the rest of the fiscal year, Tiffany plans to open 10 company-operated stores and close three existing stores: opening four in the Americas, two in Asia-Pacific, two in Japan, and one each in Europe and Russia, while closing one each in the Americas, Asia-Pacific and the United Arab Emirates. Tiffany also increased its net earnings forecast for the fiscal year and expects worldwide net sales growth.

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FINANCE

Chico’s Q2 profit disappoints amid price cuts

BY Dan Berthiaume

Fort Myers, Fla. – Chico’s FAS Inc. reported net income of $30.1 million in the second quarter of fiscal 2014, down 31% from $43.6 million in the year-ago period. Price cuts needed to clear seasonal merchandise were a primary driver of Chico’s lower net income. Its results missed Wall Street expectations.

Net sales for the quarter ended August 2, 2014, were $671.1 million, up 3.3% from $649.5 million in the previous year, primarily reflecting the addition of 98 net new stores.

Total same-store sales rose 0.3%.

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FINANCE

Survey: Consumers prefer cash for small purchases

BY Dan Berthiaume

Austin, Texas – Approximately two in three credit cardholders typically use cash for purchases of less than five dollars. According to a new CreditCards.com report, a clear generational divide in the way Americans pay for small purchases means that might not be the case for much longer.

The tendency to use cash increases sharply with age. Almost eight-in-10 credit cardholders age 50 and older prefer to use cash for small transactions. For cardholders between ages 18 and 49, it’s virtually a dead heat between cash (52%) and credit/debit cards (46%).

The youngest cardholders (18-29 year-olds) are the only age group to prefer plastic. Digging a little deeper, Millennials with credit cards prefer debit over credit by a ratio of nearly three-to-one. Among all cardholders, debit outpaces credit by a two-to-one margin.

Other key findings:

• Cash is the preferred payment method for almost eight-in-10 rural cardholders versus just 62% of city dwellers and suburbanites.

• Cardholders without children under 18 are 10 percentage points more likely to use cash than those with young children.

"The question is whether Millennials will eventually embrace credit as they age and their financial situations change," said Matt Schulz, senior industry analyst, CreditCards.com. "I believe they will, due in large part to credit’s more lucrative rewards programs and better consumer protections."

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