By Lenore Fedow
lenore.fedow@nationaljeweler.com
The “Five Golden Schlumberger Rings” ($210,000) featured in Tiffany & Co.’s new high-end holiday gift guide. The jeweler fell short of revenue and same-store sales expectations in the third quarter.
New York—Tiffany & Co. missed the mark on revenue and same-store sales in the third quarter as demand in the Americas weakened and the toll of the Hong Kong protests outweighed growth in mainland China.

It was the American jeweler’s first earnings report since announcing its pending acquisition by French luxury titan LVMH Moët Hennessy Louis Vuitton in a deal valued at $16.2 billion.

Net sales in the third quarter were unchanged at $1.014 billion, compared with $1.012 billion a year ago.

Same-store sales were also flat.

The jeweler fell short of analyst expectations of $1.037 billion in revenue with same-store sales growth of 1 percent.

Excluding the Hong Kong market, worldwide sales increased 4 percent with same-store sales rising 3 percent.

Gross profit dipped 1 percent to $625.7 million, or 62 percent of sales, compared with $629.3 million, or 62 percent of sales, a year ago.

“Our underlying business remains healthy with sales attributed to local customers on a global basis growing in the third quarter, led by strong double-digit growth in the Chinese Mainland offset in part by softness in domestic sales in the Americas,” CEO Alessandro Bogliolo said in a press release.


(Tiffany did not hold an earnings call discussing the results.)

Net sales in the Americas, where the most Tiffany stores are located, were down 4 percent to $423 million due in part to a decline in sales from both local customers and tourists.

Same-store sales in the region also fell 4 percent.

European sales fell 3 percent to $111 million, attributed to the effect of foreign currency translation, while same-store sales were unchanged.

Asia-Pacific sales were flat at $294 million, also attributed to foreign currency translation, while same-store sales were down 2 percent.

Tiffany highlighted its double-digit growth in mainland China while noting the effect of “significant disruptions” in Hong Kong related to the ongoing political unrest in the region.

Higher spending by locals was offset by a dip in tourist spending.

In Japan, third-quarter sales soared 19 percent to $169 million with same-store sales also up 19 percent.

Tiffany attributed the growth to customers getting in last-minute shopping before the country’s consumption tax hike took effect in October, rising from 8 percent to 10 percent on most goods.

Sales from the “other” segment, which includes five Tiffany stores in the United Arab Emirates, fell 13 percent to $17 million while same-store sales were down 3 percent.

By category, sales from Tiffany’s jewelry collections, which includes lines like “Tiffany T” and “Paper Flowers,” and sales from its engagement jewelry, were unchanged.

Sales of jewelry from designers Elsa Peretti, Paloma Picasso and Tiffany & Co. Schlumberger increased 1 percent.

Bogliolo noted in the second-quarter earnings call in August that the company plans to “properly refresh our product assortment,” by fiscal 2021.

The jeweler recently added colorful pieces to its “Tiffany T” collection, introduced a men’s collection, launched his and hers Tiffany & Love fragrances, and the new “Very, Very Tiffany” holiday campaign and catalog featuring luxe, high-ticket gift items.

As of Oct. 31, there were 323 Tiffany stores in operation worldwide, including 124 in the Americas, compared with 321 a year ago.

Tiffany did not provide guidance for the year ahead, but Chief Financial Officer Mark Erceg noted in the second quarter that if the ongoing unrest in Hong Kong continues, the jeweler’s full-year sales and EPS (earnings per share) could come in at the lower end of its guidance range.


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