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China Recovery Lifts Tiffany
Nov 29, 2017 10:20 AM
By Rapaport News
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RAPAPORT... Tiffany & Co received a boost from improved retail
demand in Asia during its third fiscal quarter, as the company seeks to return
to growth this holiday season.
Group sales rose 3% year on year to $976.2 million in the
three months that ended October 31, with a strong performance in the fashion-jewelry
and solitaire categories, as well as in high and fine jewelry. Comparable-store
sales slipped 1%, but profit increased 5% to $100.2 million.
“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,” said Alessandro Bogliolo, who joined the jeweler as
CEO last month.
Sales in the Americas climbed 1% to $421 million, as
higher demand from local customers outweighed weaker spending by foreign
tourists, the company said. Asia-Pacific revenue jumped 15% to $283 million,
largely due to growth in mainland China. Sales in Hong Kong were almost flat, after
three years of substantial declines, Mark Aaron, Tiffany’s vice president for
investor relations, said on a conference call Wednesday.
However, revenue declined from Tiffany’s diamond wholesale
business, resulting in a 26% slide in “other sales” — including both the wholesale
unit and retail sales at stores in non-core regions.
In the first nine months of the fiscal year, group sales
increased 2% to $2.84 billion, while comparable-store sales dipped 2%, and
profit jumped 7% to $308.2 million.
Bogliolo, who previously served as CEO of Italian
clothing brand Diesel, is attempting to achieve a turnaround at Tiffany, after
global sales fell 3% in the last full fiscal year that ended January 31. Last
year’s holiday sales dropped 4% due to weak consumer spending and protests
outside Trump Tower, which neighbors the retailer’s flagship Fifth Avenue store
in New York.
This year, the company has looked to new strategies to
attract consumers, including opening pop-up stores in key New York locations,
and expanding its range of products. The jeweler recently launched a luxury collection
of everyday items, and also opened a café inside the Fifth Avenue outlet.
Image: J. Lekavicius/Shutterstock
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Tags:
Alessandro Bogliolo, asia, China, Diesel, fifth avenue, Hong Kong, Jewelry, Mark Aaron, new york, Rapaport News, retail, Tiffany, Tiffany & CO., Trump Tower
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