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Tiffany Sales Climb as US, Asia Recover

Mar 18, 2018 4:08 AM   By Rapaport News
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RAPAPORT... Tiffany’s sales jumped 9% in the fourth fiscal quarter, as US and Far East demand strengthened.

Global revenue grew to $1.33 billion, the company said Friday. Sales increased 13% year on year to $320 million in the Asia-Pacific region for the three months ending January 31, while revenue in the Americas climbed 5% to $619 million.

However, worldwide comparable-store sales — those at branches open for at least a year — rose by just 1% at constant currency rates, missing analysts’ estimates of a 2.7% gain, according to Bloomberg.

“We will only be truly satisfied when we create greater excitement for our customers, and also generate growth that reflects the full potential of our brand,” said Tiffany CEO Alessandro Bogliolo.

Bogliolo, who joined Tiffany last year, is aiming to revitalize the luxury brand in an attempt to make it more attractive to millennials. To that end, he outlined several strategic priorities on which it intends to focus, including changes to its products, in-store presentation, and omni-channel customer experience. It also aims to increase its operational efficiency.

“We are pleased to be finishing the year with solid sales growth, both geographically and across product categories,” the executive added. “Most important, however, is to generate sustainable growth in sales, margins and earnings over the long term.”

Profit plummeted 61% to $61.9 million in the fourth quarter, due to charges related to US tax changes. For accounting reasons, Tiffany will not see a benefit from the Tax Cuts and Jobs Act until its global branches sell off merchandise they have in stock or have ordered, chief financial officer Marc Erceg explained in an investor call. Without these charges, net profit would have surged 15% to $208 million.

Sales for the full fiscal year increased 4% to $4.17 billion, while profit dropped 17% to $370.1 million due to the tax-related charges. Tiffany expects a “mid-single-digit” percentage increase in sales in the fiscal year ending January 2019. The retailer’s share price fell 5% Friday.

Image: J Lekavicius/Shutterstock
Tags: Alessandro Bogliolo, Asia-Pacific, Bloomberg, Marc Erceg, Rapaport News, Tax Cuts and Jobs Act, Tiffany, US
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