Announcing its financial results for the three months ended April 30, 2017 (Q1 FY 2017), Tiffany & Co said its worldwide net sales rose 1% to $900 million due to growth in Asia-Pacific and an increase in the wholesale sales of diamonds, with comparable store sales 3% below the prior year.

The Company said that on a constant-exchange-rate basis worldwide net sales increased 2%, and comparable store sales declined 2%. In addition to the factors driving overall growth, sales in Europe were also up on a constant-exchange-rate basis. Higher fashion and designer jewellery sales contrasted with softness in other categories.

There were differing results across geographical regions, Tiffany added. In the Americas, total sales of $392 million were 3% lower than the prior year and comparable store sales declined 4%. Sales were geographically mixed across the region, and the overall sales decline was due to lower spending by both foreign tourists and local customers.

In the Asia-Pacific region, total sales of $257 million were 8% above the prior year, while comparable store sales declined 3%. There was strong growth in mainland China and varying degrees of softness in other markets. The overall increase was attributed to rise in wholesale sales and the effect of stores opened in the past year.

In Japan, total sales of $128 million were 2% below the prior year, and comparable store sales declined 1% mainly due to lower spending by Chinese tourists. On a constant-exchange-rate basis, total and comparable store sales declined 3% and 1%, respectively.

In Europe, total sales declined 3% to $94 million and comparable store sales also declined 3%. On a constant-exchange-rate basis, total sales and comparable store sales rose 4% and 3%, respectively. Performance was generally soft in continental Europe, while in UK growth was due to spending by local customers and foreign tourists.

Other sales in total rose 32% to $28 million due to an increase in wholesale sales of diamonds.

Tiffany said it did not open any Company-operated stores in the first quarter and closed three. At April 30, 2017, the Company operated 310 stores (124 in the Americas, 84 in Asia-Pacific, 54 in Japan, 43 in Europe, and five in the UAE), versus 308 stores a year ago (124 in the Americas, 81 in Asia-Pacific, 55 in Japan, 43 in Europe, and five in the UAE).

The Company also reported net earnings of $93 million, or $0.74 per diluted share, compared with $87 million, or $0.69 per diluted share, a year ago.

Gross margin (gross profit as a percentage of net sales) increased to 62.0% in the first quarter, from 61.2% a year ago, Tiffany said, primarily reflecting favorable product input costs and a shift in sales mix toward higher margin fashion jewellery products, partly offset by increased wholesale sales of diamonds.

Earnings from operations as a percentage of net sales was 16.2% in the first quarter, compared with 15.1% a year ago, Tiffany added.

Michael J. Kowalski, Chairman of the Board and Interim Chief Executive Officer, said, “While these results modestly exceeded our near-term expectations, we are focused on executing long-term strategies to achieve stronger and sustainable performance through product introductions, optimization of our store base, effective marketing communications and the delivery of experiences that resonate with our customers.”

The Company said that its outlook for the fiscal calls for: (i) worldwide net sales increasing over the prior year by a low-single-digit percentage as reported and on a constant-exchange-rate basis and (ii) net earnings per diluted share increasing by a high-single-digit percentage over 2016’s earnings per diluted share of $3.55 and by a mid-single-digit-percentage over 2016’s earnings per diluted share (excluding charges) of $3.75.