Financials

Tiffany sees third quarter comps fall

FinancialsMar 03, 2016

Tiffany sees third quarter comps fall

Despite sales growth in Canada and Latin America, weak tourist spending in the United States resulted in a poor third quarter in the Americas for Tiffany & Co.

While Tiffany’s overall sales were slow in the third quarter, the retailer reported strong sales of gold fashion jewelry worldwide with its T collection (pictured here) particularly popular.

New York--Despite sales growth in Canada and Latin America, weak tourist spending in the United States resulted in a poor third quarter in the Americas for Tiffany & Co., the retailer reported Tuesday.

The New York-based retailer’s same-store sales in the Americas were down 6 percent during the period ended Oct. 31, while total sales on a constant-exchange-rate basis fell 5 percent. 

Despite strong sales of statement jewelry, there were “varying degrees of softness across most other jewelry categories” compared with last year’s strong third quarter, executives said in Tuesday’s earnings conference call.

Year-to-date comps and total sales also were down in the region, declining 2 percent and 1 percent, respectively.

The retailer said the declines were due in large part to lower foreign tourist spending in the U.S., attributed to the strong dollar, while sales to U.S. customers were relatively flat to last year due to a difficult year-over-year comparison as well as continued softness in consumer spending. 

Tiffany executives also noted during the call that the retailer is in the process of some major U.S. store renovations. It just completed an upgrade of its store on Michigan Avenue in Chicago and now is focusing on its stores in San Francisco’s Union Square and on Rodeo Drive in Beverly Hills. 

Globally, total same-store sales inched up 1 percent while total sales on a constant-exchange-rate basis rose 4 percent to $938 million in the third quarter. Sales growth in Japan, Europe and Asia-Pacific was partly offset by the lower sales in the Americas.

Worldwide, Tiffany said it recorded considerable growth in sales of high-end statement jewelry through its VIP customer events. Engagement jewelry performed well in Japan and Europe but was soft globally. 

Gold fashion jewelry sales also were strong, reflecting the success of the Tiffany T collection.

The company noted that it is focused on expanding and refreshing existing collections, including reintroducing designs in its “Return to Tiffany”collection to improve its silver sales at price points below $500.

Meanwhile, Tiffany’s Infinity collection has been expanded in silver and gold, and the retailer also expanded the Victoria collection with new designs in platinum and diamonds as well as the Tiffany Bow collection with designs in gold and diamonds. 

Executives also said that they have been happy with sales of the new CT60 and East West watch collections launched earlier this year. 

In the nine-month period ended

Oct. 31, Tiffany’s global same-store sales were up 2 percent and total sales rose 4 percent. The company said that it raised prices during the quarter, which moved it closer to restoring its global pricing structure to normal levels given the dollar’s continued strength. 

Tiffany opened two company-operated stores in the third quarter--in Santiago, Chile, and Macau--while closing one in Korea. Year-to-date, it has opened 10 net new stores.

As of Oct. 31, Tiffany operated 305 stores: 125 in the Americas, 79 in Asia-Pacific, 56 in Japan, 39 in Europe, and five stores in the United Arab Emirates and one in Russia. This is up from the 294 stores it operated a year ago: 122 in the Americas, 72 in Asia-Pacific, 56 in Japan, 38 in Europe, and five in the UAE and one in Russia.

Brecken Branstratoris the senior editor, gemstones at National Jeweler, covering sourcing, pricing and other developments in the colored stone sector.

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