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Tiffany records increase in Q3 earnings as China sales improve 70 percent

By Prachi Singh

Nov 24, 2020

Tiffany & Co. has said that in the third quarter, worldwide net sales returned to the billion dollar level and represented a decrease of 1 percent as compared to the prior year; on a constant-exchange-rate basis, worldwide net sales for the three months were 2 percent below the prior year. The company said, net earnings increased 52 percent to 119 million dollars, showing 73 percent improvement when excluding certain costs related to the merger. Net earnings per diluted share were 98 cents versus 65 cents in the prior year.In the year-to-date, worldwide net sales decreased 25 percent on a constant-exchange-rate and decreased 24 percent in the nine months as compared to the prior year, while net earnings turned positive in the year-to-date.

Commenting on the results, Alessandro Bogliolo, Tiffany’s Chief Executive Officer, said in a statement: “We had a strong third quarter both in sales on a relative basis and terrific results in profitability on an absolute basis, which speaks volumes about the enduring strength of the Tiffany brand and gives us confidence as we enter the important holiday season. We look forward to surprising and delighting our consumers during the holiday season and the successful completion of the merger transaction with LVMH in early 2021.”

Review of Tiffany’s Q3 and nine months results

Tiffany’s third quarter comparable sales increased by 3 percent; on a constant-exchange-rate basis, comparable sales increased 1 percent from the prior year. For the nine month period, comparable sales declined 22 percent from the prior year and on a constant-exchange-rate basis, comparable sales declined 21 percent.

By region, in the Americas, total sales decreased 16 percent in the third quarter and 36 percent in the year-to-date, to 354 million dollars and 826 million dollars, respectively; comparable sales decreased 15 percent in the third quarter and 35 percent in the year-to-date. On a constant-exchange-rate basis, total sales declined 15 percent in the third quarter and 35 percent in the year-to-date, and comparable sales declined 14 percent in the third quarter and 34 percent in the year-to-date.

In Asia-Pacific, Tiffany added, total sales grew by 30 percent in the third quarter and decreased 7 percent in the year-to-date to 382 million dollars and 854 million dollars, respectively, which included comparable sales increases of 40 percent in the third quarter and 3 percent in the year-to-date. In the third quarter, total sales results reflected strong retail sales growth in Mainland China and Korea, partially offset by mixed performance across other markets in the region. On a constant-exchange-rate basis, total sales increased 26 percent in the third quarter and decreased 6 percent year-to-date, while comparable sales increased 36 percent in the third quarter and 3 percent in the year-to-date as compared to the prior year.

In Japan, total sales decreased 8 percent in the third quarter and 25 percent in the year-to-date to 156 million dollars and 353 million dollars, respectively; comparable sales decreased 4 percent and 23 percent for those same periods, respectively. On a constant-exchange-rate basis, total sales decreased 9 percent in the third quarter and 26 percent in the year-to-date, and comparable sales decreased 5 percent and 24 percent, respectively.

In Europe, total sales declined 6 percent in the third quarter and 24 percent in the year-to-date to 104 million dollars and 249 million dollars, respectively, and comparable sales declined 6 percent in the third quarter and 25percent in the year-to-date. On a constant-exchange-rate basis, total sales decreased 9percent in the third quarter and 24 percent in the year-to-date; comparable sales decreased 9 percent and 25 percent, respectively.

Other net sales decreased 30 percent to 12 million dollars in the third quarter and 59 percent to 28 million dollars in the year-to-date due to decreases in sales within the Emerging Markets region in both periods and a decrease in wholesale sales of diamonds in the year-to-date. Tiffany has opened two company-operated stores in the year-to-date and closed eight and at October 31, 2020, operated 320 stores including 122 in the Americas, 87 in Asia-Pacific, 59 in Japan, 47 in Europe, and five in the UAE.

Picture:Facebook/Tiffany