‘Softness’ in U.S. Brings Tiffany Q4 Comps Down in Americas

FinancialsMar 18, 2016

‘Softness’ in U.S. Brings Tiffany Q4 Comps Down in Americas

Due to lower foreign spending and softness in sales to U.S. consumers, same-store sales and total sales decreased in the company’s Americas regions in both the fiscal fourth quarter and the full-year period.

New York--Tiffany & Co. reported Friday that comps in the Americas in the fiscal fourth quarter ended Jan. 31 were down 8 percent, with total sales in the region also declining by 6 percent in the period.

The company attributed this to lower foreign spending in the U.S. because of the strength of the U.S. dollar, as well as a softness in sales to U.S. customers.

In the full-year period, comparable store sales and total sales in the Americas were down 4 percent and 2 percent, respectively.

Aside from the softness in the U.S., other parts of the Americas region showed some strength, with total sales on a constant-exchange-rate basis rose in Canada and Latin America.

On a global basis, comps were down 5 percent in the fourth quarter and flat for the 12-month period. Worldwide net sales, meanwhile, rose 2 percent due to higher sales in Asia-Pacific, Japan and Europe.

In the Asia-Pacific region, comps in the fourth quarter were down 8 percent while total sales declined 3 percent. Meanwhile, in the full year, same-store sales were about flat while total sales on a constant-exchange-rate basis rose 3 percent.

Japan reported a positive performance, with fourth quarter total sales rising 12 percent and comparable store sales rising 10 percent. For the full year, on a constant-exchange-rate basis total sales and comparable store sales rose 10 percent and 5 percent, respectively.

The majority of the sales growth in both of these periods for Japan reflected higher sales to foreign tourists, Tiffany said.

In Europe, total sales in the fourth quarter increased 2 percent and comps declined 3 percent, due to varying performance across the region, including sales growth in the U.K. and a decline in France.

On a constant-exchange-rate basis, total sales and comparable store sales in the region for the full year rose 12 percent and 9 percent, respectively, due to broad-based sales growth reflecting higher spending by local customers and foreign tourists.

Tiffany’s opened 16 company-operated stores in the full year and closed four locations. As of Jan. 31, they 307 total stores: 124 in the Americas, 81 in Asia-Pacific, 56 in Japan, 41 in Europe and five in the UAE. This is compared with 295 stores a year ago: 122 in the Americas, 73 in Asia-Pacific, 56 in Japan, 39 in Europe and five in the UAE.

“We are assuming that sales and

earnings growth in 2016 will continue to be pressured by various factors including a further strengthening of the dollar, along with volatile and uncertain economic and equity market conditions that will likely affect consumer spending,” CEO Frederic Cumenal said, adding that the company will continue to focus on growing sales on a constant-exchange-rate basis across all regions, jewelry categories and price points.
Brecken Branstratoris the senior editor, gemstones at National Jeweler, covering sourcing, pricing and other developments in the colored stone sector.

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