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Tiffany Sparkles With Rare Sales Rise

Nov 29, 2016 9:03 AM   By Rapaport News
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RAPAPORT... Tiffany & Co’s shares rose 3 percent after the jeweler reported its first sales growth in two years.

Net sales advanced 1 percent to $949.3 million in the three months that ended October 31 with an improvement in fashion jewelry partly offset by softness in other product categories. At constant exchange rates, net sales were flat and comparable store sales fell 3 percent. Net earnings increased 5 percent to $95.1 million, the New York-based retailer said.

The revenue growth was the first in eight quarters, according to Rapaport records, and represents a rebound from Tiffany’s 7.1 percent sales slide in the first quarter and 6 percent drop in the second quarter. However, the company still maintained its forecast of a low single-digit percentage point decline in sales in the current fiscal year.

“We are encouraged by early signs of improvement in sales, but we clearly need more positive data over time before this can be considered an inflection point,” Frederic Cumenal, Tiffany’s chief executive officer, said.

The volatile economy and uncertainty surrounding the election of a Hong Kong chief executive next year contributed to the decision not to raise guidance. The impact of protests against U.S. President-Elect Donald Trump in front of Trump Tower next to Tiffany's flagship Manhattan store was a further factor. The demonstrations had a disruptive effect on foot traffic since the November 8 elections, the company said in an investor call.

Sales in the Americas region fell 2 percent to $417 million because of lower spending by U.S. customers, while revenue increased from foreign tourists in the U.S, primarily from Japan.

Asia-Pacific sales increased 4 percent to $247 million as China recorded a “double-digit” jump and the rate of sales decline in Hong Kong decelerated. Sales in Japan jumped 13 percent to $150 million driven by the appreciation of the yen against the U.S. dollar, while at constant exchange rates they fell 4 percent.

Image: Alfisti116
Tags: americas, Asia-Pacific, China, Frederic Cumenal, Hong Kong, Jewelry, new york, Rapaport News, retail, Tiffany, Tiffany & CO., u.s.
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