Tiffany & Co. Posts Lackluster Financial Results For First QuarterMay 24, 17
(IDEX Online) – Tiffany & Co. reported anemic financial results for the three months ended April 30.
Worldwide net sales rose 1 percent to $900 million due to growth in Asia-Pacific and an increase in the wholesale sale of diamonds, while comparable store sales were 3 percent below the prior year.
Net earnings of $93 million compared with $87 million, a year ago.
Michael J. Kowalski, Chairman of the Board and Interim Chief Executive Officer, said, "While these results modestly exceeded our near-term expectations, we are focused on executing long-term strategies to achieve stronger and sustainable performance through product introductions, optimization of our store base, effective marketing communications and the delivery of experiences that resonate with our customers. In so doing, we believe Tiffany & Co. is well-positioned to generate an attractive total shareholder return over the long-term."
Net sales by region in the first quarter were as follows:
- In the Americas, total sales of $392 million were 3 percent lower than the prior year and comparable store sales declined 4 percent. There was no impact from currency translation on reported sales. Sales results were geographically mixed across the region, and management attributed the overall sales declines to lower spending by both foreign tourists and local customers.
- In the Asia-Pacific region, total sales of $257 million were 8 percent above the prior year, while comparable store sales declined 3 percent. Management attributed total sales growth to increased wholesale sales and the effect of stores opened in the past year, while comparable store sales were affected by strong growth in mainland China and varying degrees of softness in other markets. On a constant-exchange-rate basis, total sales rose 9 percent and comparable store sales declined 2 percent.
- In Japan, total sales of $128 million were 2 percent below the prior year, and comparable store sales declined 1 percent. Management attributed the sales declines to lower spending by Chinese tourists. On a constant-exchange-rate basis, total and comparable store sales declined 3 percent and 1 percent, respectively.
- In Europe, total sales declined 3 percent to $94 million and comparable store sales also declined 3 percent. On a constant-exchange-rate basis, total sales and comparable store sales rose 4 percent and 3 percent, respectively. Performance was generally soft in continental Europe, while management attributed sales growth in the United Kingdom on a constant-exchange-rate basis to spending by local customers and foreign tourists.
- Other sales in total rose 32 percent to $28 million due to an increase in wholesale sales of diamonds.
- Tiffany did not open any company-operated stores in the first quarter and closed three. At April 30, 2017, the company operated 310 stores (124 in the Americas, 84 in Asia-Pacific, 54 in Japan, 43 in Europe, and five in the UAE), versus 308 stores a year ago (124 in the Americas, 81 in Asia-Pacific, 55 in Japan, 43 in Europe, and five in the UAE).
Management's outlook for the fiscal year ending January 31, 2018 (fiscal 2017) calls for worldwide net sales increasing over the prior year by a low-single-digit percentage.