Tiffany reports third-quarter sales up 3%

Tiffany & Co’s sales rose 3 percent in the third quarter, helped by strong demand for its fashion jewelry. The company’s net income rose to $100.2 million, or 80 cents per share, in the quarter ended Oct. 31, from $95.1 million, or 76 cents per share, a year earlier. Total revenue rose to $976.2 million from $949.3 million.

In the Americas, total sales of $421 million in the third quarter were 1% above the prior year and total sales of $1.3 billion in the year-to-date were approximately equal to the prior year; comparable store sales increased 1% and declined 1% in the third quarter and year-to-date, respectively. Management noted that there were no significant geographic variations across the region, and attributed the overall sales softness to lower spending by foreign tourists.

In the Asia-Pacific region, total sales rose 15% to $283 million in the third quarter and increased 8% to $775 million in the year-to-date; comparable store sales rose 2% and declined 2% in those respective periods. Total sales growth resulted from increased wholesale and retail sales; on a comparable store sales basis, strong growth in mainland China contrasted with declines in most other countries, which management attributed largely to lower Chinese tourist spending.

In Japan, total sales of $139 million in the third quarter and $407 million in the year-to-date were 8% and 3% below the respective prior-year periods; comparable store sales declined 8% in the third quarter and 2% in the year-to-date. Sales declines in both periods largely reflected the negative effect of a weaker yen versus the dollar.

In Europe, total sales increased 5% in the third quarter to $110 million and rose 2% in the year-to-date to $318 million; comparable store sales declined 3% in both periods. Management noted total retail sales growth across most of continental Europe, and a decline in sales in the U.K. (which had achieved strong growth in last year’s third quarter following the weakening of the British pound). On a constant-exchange-rate basis, total sales increased 1% in the quarter and 3% in the year-to-date due to the effect of new stores; comparable store sales declined 8% and 2%, respectively

Other sales of $23 million in the third quarter were 26% below the prior year while year-to-date sales of $84 million were 18% above the prior year, primarily reflecting a decline in wholesale sales of diamonds in the quarter and an increase in the year-to-date; comparable store sales increased 7% in the quarter and were unchanged in the year-to-date

Tiffany has opened seven Company-operated stores in the year-to-date and closed five. At October 31, 2017, the Company operated 315 stores (125 in the Americas, 86 in Asia-Pacific, 54 in Japan, 46 in Europe, and four in the UAE), versus 313 stores a year ago (125 in the Americas, 85 in Asia-Pacific, 55 in Japan, 43 in Europe, and five in the UAE).

Alessandro Bogliolo, Chief Executive Officer, who joined Tiffany in October, said, “These latest financial results marginally exceeded our expectations, but I believe that Tiffany has the medium to long-term potential to achieve meaningful comparable store sales growth and drive higher operating margins and earnings growth. Looking forward, we will increasingly capitalize on the strength of the TIFFANY & CO. brand with stronger organizational focus on innovation in product, digital, communication and the customer experience.”

Tiffany & Co

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