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Tiffany reports financial results

Tiffany & Co

Tiffany & Co.reported its financial results for the fourth quarter and the full year ended 31st January, 2020. Net sales increased 3% in the fourth quarter and were approximately unchanged in the full year, as compared to the respective prior year periods.

SEE ALSO : Guess reports fiscal year

Alessandro Bogliolo, Chief Executive Officer, said, “We look back on fiscal 2019 as a year of progress on all of our strategic initiatives. We attribute the acceleration in the fourth quarter across most of our markets to our focus on elevating our sales mix towards higher value items within each jewelry product category, with the largest growth being in our gold and gold and diamond offerings. The higher price points of these items contributed to the approximately 10% increase in our overall average unit retail price this full year compared to the prior year.”

In the fourth quarter, worldwide net sales of $1.4 billion and comparable sales both increased 3% from the prior year; on a constant-exchange-rate basis, which excludes the effect of translating foreign-currency-denominated sales into U.S. dollars, net sales and comparable sales also increased 3% from the prior year.

Worldwide net sales and comparable sales, excluding the Hong Kong market in both years, increased by 5% each from the prior year.

Net earnings of $201 million were 2% lower than the prior year’s $205 million, and net earnings per diluted share were $1.66 versus $1.67 in the prior year. Excluding certain costs recorded in the period related to the proposed acquisition of the company by LVMH Moët Hennessy, pursuant to the Agreement and Plan of Merger, dated as of November 24, 2019  by and among the Company, LVMH, Breakfast Holdings Acquisition Corp. and Breakfast Acquisition Corp., fourth quarter net earnings were $218 million, or $1.80 per diluted share.

In the full year report, worldwide net sales were approximately unchanged at $4.4 billion and comparable sales declined 1% from the prior year; on a constant-exchange-rate basis, net sales increased 1% from the prior year and comparable sales were approximately unchanged.

Net earnings of $541 million were 8% lower than the prior year’s $586 million, and net earnings per diluted share were $4.45 versus $4.75 in the prior year.

In the Americas, total net sales increased 4% in the fourth quarter and decreased 2% in the full year as compared to the prior year, to $640 million and $1.9 billion, respectively; comparable sales increased 3% in the fourth quarter and decreased 2% in the full year.

In Asia-Pacific, total net sales increased 8% in the fourth quarter and 2% in the full year, to $342 million and $1.3 billion, respectively; comparable sales increased 7% in the fourth quarter and decreased 1% in the full year. Total sales growth in both periods reflected increased wholesale sales, as well as business sales in the full year. Sales performance in both periods reflected double-digit growth in the Chinese Mainland, significant disruptions in Hong Kong beginning earlier in the year and mixed performance in other markets in the region. Management also attributed these sales results to higher spending by local customers, partially offset by lower spending by foreign tourists.

In Japan, total net sales decreased 8% in the fourth quarter and increased 1% in the full year, to $180 million and $650 million, respectively; comparable sales decreased 8% in the fourth quarter and were unchanged in the full year. Management believes that the sales decrease in the fourth quarter reflected the Japanese consumers’ response to the increase in Japan’s consumption tax that took effect on 1st October, 2019.

In Europe, total net sales increased 4% in the fourth quarter and decreased 1% in the full year, to $168 million and $498 million, respectively; comparable sales increased 5% in the fourth quarter and declined 1% in the full year. The increase in the fourth quarter reflected sales growth across most of the region, which management attributed to higher spending by both local customers and foreign tourists

Other net sales decreased 9% to $26 million in the fourth quarter and 2% to $94 million in the full year, primarily due to a decrease in the wholesale sales of diamonds. Comparable sales increased 11% and decreased 9% in the fourth quarter and the full year, respectively.

SEE ALSO : Tiffany & Co. opens new Perth store

Tiffany opened nine company-operated stores in the full year and closed four. At 31st January, 2020, the company operated 326 stores (124 in the Americas, 91 in Asia-Pacific, 58 in Japan, 48 in Europe, and five in the UAE).

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