Aug 30, 2017

Tiffany Reports Modest Net Sales Increases for Q2 and H1 Fiscal 2017

Tiffany & Co., which recently reported its financial results for the three months (second quarter) and six months (first half) ended July 31, 2017, said that in both periods, it had registered "modest net sales increases".

Further, the Company’s improved operating margins also contributed to growth in diluted earnings per share.

 Worldwide net sales in the second quarter increased by 3% to US$ 960 million, as compared to the  previous year; while comparable store sales declined 2%.  The Company reported an  increase in wholesale sales of diamonds, increased wholesale sales in the Asia-Pacific region and strong e-commerce sales growth. “Overall, growth in fashion and designer jewellery sales contrasted with softness in other jewellery categories,” Tiffany noted.  On a constant-exchange-rate basis   worldwide net sales rose 4% and comparable store sales declined 1%, the Company said.

Tiffany’s net earnings rose 9% to US$ 115 million, or US$ 0.92 per diluted share, from US$ 106 million, or US$ 0.84 per diluted share in the same period of the previous fiscal.

For the first half of fiscal 2017, Tiffany’s worldwide net sales amounted to US$ 1.9 billion and stood  2% higher than that in H1 2016;   while comparable store sales fell 2% below the figure achieved in the prior year.   On a constant-exchange-rate basis, worldwide net sales rose 3% and comparable store sales declined 1%.

The Company’s net earnings for the first half of fiscal 2017 increased by 8% to US$ 208 million, or US$ 1.66 per diluted share, from US$ 193 million, or US$ 1.53 per diluted share, a year ago.

By region, Tiffany’s  total sales in the  Americas were up by  1% to US$ 439 million in the quarter;  and showed a decline  of  1% to US$ 830 million in the first half.  

Total sales in  the Asia-Pacific region, amounted to US$ 235 million in the quarter and US$ 492 million in the first half; and were thus,   2% and 5% higher, respectively,  than the comparative periods of the previous year.

Japan accounted for  total sales worth US$ 140 million in the quarter; which  were  1% above the prior year;  while Tiffany’s sales in the country of US$ 268 million in the first half, were virtually flat compared to the prior year.

 Tiffany’s sales in  Europe amounted to US$ 114 million in the quarter and were 3% above the previous year; while at US$ 208 million sales for the first half were equal to the prior year. 

“Other sales increased 74% to US$ 32 million in the quarter and rose 51% to US$ 61 million in the first half,” Tiffany stated. “The increases were entirely due to increased wholesale sales of diamonds while comparable store sales declined 8% and 3%, respectively.”

As on July 31, 2017, the Company operated 312 stores (124 in the Americas, 85 in Asia-Pacific, 54 in Japan, 44 in Europe, and five in the UAE), versus 311 stores a year ago (125 in the Americas, 83 in Asia-Pacific, 55 in Japan, 43 in Europe, and five in the UAE).

Tiffany’s net inventories amounting to US$ 2.2 billion as on  July 31, 2017 were 4% lower than a year ago “primarily due to a reduction in finished goods inventories”, the Company noted.

Michael J. Kowalski, Chairman of the Board and Interim Chief Executive Officer, commented:  “While net earnings rose in the first half, we remain determined to drive comparable store sales growth and stronger, sustainable earnings growth through a continued focus on product design innovation in jewellery and luxury accessories, further optimisation of our store base, more impactful marketing communications and highly effective customer engagement both in-store and online.”

 Kowalski also  announced  the appointment of Alessandro Bogliolo as the  new Chief Executive Officer of Tiffany, who is expected to join shortly.