Tiffany posts flat Q3 sales growth, profit drops 17 percent

For the third quarter, Tiffany & Co., said, worldwide net sales remained unchanged to 1 billion dollars from the prior year and decreased 2 percent to 3.1 billion dollars in the year-to-date period. On a constant-exchange-rate basis, worldwide net sales were 1 percent above the prior year and unchanged in the year-to-date period. The company said in a statement that net earnings of 78 million dollars declined 17 percent or to 65 cents per share in the third quarter and by 11 percent in the nine months to 340 million dollars or 2.80 dollars per share.

Commenting on the trading performance, Alessandro Bogliolo, the company’s Chief Executive Officer, said: “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. We are very excited about the recently announced transaction with LVMH and look forward to becoming part of the LVMH family of exceptional luxury brands.”

Tiffany’s performance in Q3 and nine months

Worldwide net sales and comparable sales at Tiffany, excluding the Hong Kong market in both years, increased by 4 percent and 3 percent, respectively, from the prior year.

In the Americas, total net sales decreased 4 percent in both the third quarter and the year-to-date, to 423 million dollars and 1.3 billion dollars, respectively; comparable sales decreased 4 percent in the third quarter and 5 percent in the year-to-date. Sales decreased across most of the region, and management attributed that decline to lower spending by foreign tourists and, to a lesser extent, local customers. On a constant-exchange-rate basis, total sales and comparable sales both declined 4percent in the third quarter and year-to-date.

In Asia-Pacific, total net sales were unchanged in the third quarter and decreased 1 percent in the year-to-date, to 294 million dollars and 916 million dollars, respectively, which included comparable sales declines of 2 percent in the third quarter and 3 percent in the year-to-date. Management attributed the decrease in sales in both periods to the effect of foreign currency translation. On a constant-exchange-rate basis, total sales increased 3 percent in both the third quarter and year-to-date, while comparable sales increased 1 percent for both periods as compared to the prior year. Sales performance in both periods reflected the double-digit growth in the Chinese Mainland, significant disruptions in Hong Kong beginning earlier this year and mixed performance in other markets in the region.

In Japan, total net sales increased 19 percent in the third quarter and 5 percent in the year-to-date, to 169 million dollars and 469 million dollars, respectively; comparable sales increased 19 percent and 4 percent for those same periods, respectively. On a constant-exchange-rate basis, total sales increased 14 percent in the third quarter and 4 percent in the year-to-date, and comparable sales increased 14 percent and 3 percent, respectively. Management believes that strong sales growth in the quarter prior to October 1, 2019 reflected the Japanese consumers’ response to the increase in Japan’s consumption tax that took effect on that date.

In Europe, total net sales declined 3 percent in the third quarter and 4 percent in the year-to-date to 111 million dollars and 330 million dollars, respectively, and comparable sales were unchanged in the third quarter and declined 4 percent in the year-to-date. Management attributed these changes to the effect of foreign currency translation. On a constant-exchange-rate basis, total sales increased 1 percent in both the third quarter and the year-to-date; comparable sales increased 4 percent and 1 percent, respectively.

Other net sales decreased 13 percent to 17 million dollars in the third quarter and increased by 2 percent in the year-to-date to 67 million dollars. Comparable sales declined 3 percent and 17 percent in the third quarter and the year-to-date, respectively.

Tiffany has opened five company-operated stores in the year-to-date and closed three and at October 31, 2019, operated 323 stores (124 in the Americas, 90 in Asia-Pacific, 56 in Japan, 48 in Europe, and five in the UAE).

Picture:Facebook/Tiffany & Co.