May 24, 2018

Tiffany Reports Strong Growth in Sales and Profit for Q1 Fiscal 2018

Tiffany & Co.  reporting  its financial results for the three months (first quarter) ended April 30, 2018 said worldwide net sales rose by 15% to US$ 1.0 billion.

Attributing this  to “broad-based sales growth”, the Company went on to say that comparable sales had increased 10%. “On a constant-exchange-rate basis that excludes the effect of translating foreign-currency-denominated sales into U.S. dollars … worldwide net sales and comparable sales rose 11% and 7%, respectively,” Tiffany added.

With a higher  operating margin and a lower effective tax rate, the Company reported a  53% increase in net earnings to US$ 142 million or US$ 1.14 per diluted share  as compared to   last year’s earnings of US$ 93 million, or US$ 0.74 per diluted share.

Dissecting the Company’s performance by region, Tiffany said in the Americas total net sales increased 9% to US$ 425 million and comparable sales rose 9%.   On a constant-exchange-rate basis, total sales and comparable sales increased 8% and 9%, respectively.

In Asia-Pacific, total net sales rose 28% to US$ 329 million “as a result of   increased retail sales in Greater China and most other markets, as well as higher wholesale sales in Korea”; and comparable sales rose 14%.  On a constant-exchange-rate basis, total sales and comparable sales increased 23% and 9%, respectively.

Total net sales in Japan, rose 17% to US$ 151 million and comparable sales rose 14%.  On a constant-exchange-rate basis, total sales and comparable sales were 12% and 9%, respectively, above the prior year.

In Europe, total net sales increased 13% to US$ 107 million due to, in the main, as a result of  the positive impact  from currency translation; as well as new stores; and  comparable sales rose 2%. On a constant-exchange-rate basis, total sales increased 1%, while comparable sales declined 9% due to softness across much of the region,   attributed to “lower spending by foreign tourists as well as negative effects from new stores on existing store sales”.

“Other net sales declined 21% to US$ 22 million primarily due to a reduction in wholesale sales of diamonds,” Tiffany added.

Alessandro Bogliolo, Chief Executive Officer, said, “We are very pleased with this start to the fiscal year, and we are particularly encouraged by the breadth of sales growth across most regions and all product categories.”

He expressed the Company’s  commitment to  achieve sustainable growth in comparable sales, operating margin and earnings “by pursuing and investing in the six strategic priorities we put forward in March…”

Based on the  strong and “better-than-expected results”, the Company’s management revised  upward its outlook for the full year ending January 31, 2019 (fiscal 2018). 

The Board also  approved a new share repurchase programme authorising the repurchase  of the Company’s Common Stock through open market transactions up to the value of US$ 1.0 billion.