Tiffany & Co. reported its financial results for the third quarter and year-to-date ended 31st October, 2019.
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Worldwide net sales for the third quarter were unchanged from the prior year and decreased 2% in the year-to-date period. On a constant-exchange-rate basis, which excludes the effect of translating foreign-currency-denominated sales into U.S. dollars, worldwide net sales for the third quarter were 1% above the prior year and unchanged in the year-to-date period.
Net earnings declined in both periods, reflecting lower operating margins, a higher effective income tax rate for the third quarter and a slightly lower effective income tax rate in the year-to-date period, in each case, as compared to the prior year.
Alessandro Bogliolo, 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 continuing to amplify the Brand with the recent colorful extension of Tiffany T, the launch of the men’s collection, the unveiling of the Tiffany & Love fragrance pillars and our ‘Very, Very Tiffany Holiday campaign.’”
Mr. Bogliolo concluded, “We are very excited about the recently announced transaction with LVMH and, pending the required approvals, look forward to becoming part of the LVMH family of exceptional luxury brands.”
In the Americas, total net sales decreased 4% in both the third quarter and the year-to date, to $423 million and $1.3 billion, respectively; comparable sales decreased 4% in the third quarter and 5% 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 4% in the third quarter and year-to-date.
In Asia-Pacific, total net sales were unchanged in the third quarter and decreased 1% in the year-to-date, to $294 million and $916 million, respectively, which included comparable sales declines of 2% in the third quarter and 3% 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% in both the third quarter and year-to-date, while comparable sales increased 1% 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. Management also attributed these sales results to higher spending by local customers largely offset by lower spending by foreign tourists.
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Tiffany has opened five Company-operated stores in the year-to-date and closed three. At 31 October, 2019, the Company operated 323 stores (124 in the Americas, 90 in Asia-Pacific, 56 in Japan, 48 in Europe, and five in the UAE).
(Source: Tiffany & Co. )