Tiffany & Co. reporting its financial results for the three months (first quarter) ended April 30, 2016, said that worldwide net sales of the Company were lower than the prior year – with the exception of Japan. The Company attributed the decline in most markets due to “a continuation of softness in spending by both local customers and foreign tourists”.

Tiffany’s worldwide net sales for the first quarter amounted to US$ 891 million, marking a decrease of 7% y-o-y; while comparable store sales for the period dropped by  9%  y-o-y (on a constant-exchange-rate basis that excludes the effect of translating foreign-currency-denominated sales into U.S. dollars). 

Considering net sales for the first quarter by region, Tiffany said  the Americas had recorded  total sales of US$ 403 million which reflected a 9% drop compared to the same period in the previous  prior year; while comparable store sales declined 10% (On a constant-exchange-rate basis total sales and comparable store sales declined 8% and 9%, respectively). 

The Asia-Pacific region reported total sales of US $238 million and were 8% below the prior year; while comparable store sales saw a fall of 15%. “On a constant-exchange-rate basis total sales and comparable store sales declined 5% and 12%, respectively; on that basis, total sales growth in China and Korea was offset by a continued significant decline in Hong Kong and more moderate declines in other markets,” Tiffany remarked.

Total sales for the only growth spot, Japan, amounted to US$ 131 million which was an increase of 8% y-o-y and comparable store sales increased 12%. (On a constant-exchange-rate basis total sales and comparable store sales rose 1% and 5%, respectively.)

For Europe, total sales for the period stood at US$ 97 million – a decline of 9% over the same period of the previous year and comparable store sales declined 15%. (On a constant-exchange-rate basis total sales and comparable store sales declined 7% and 14%, respectively) 

“Other sales declined 30% to US$ 22 million, and comparable store sales declined 21%, reflecting lower retail sales in the United Arab Emirates (UAE) and wholesale sales in other markets,” added the Company.

The Company reported net earnings of US$ 87 million (US$ 0.69 per diluted share, which included a tax benefit of $0.05 per diluted share related to the settlement of a tax examination), as against net earnings of US$ 105 million, or $0.81 per diluted share, in the same period of the previous year.

Tiffany commented: “Net earnings were also lower than the prior year resulting from a decline in the operating margin, as improved gross margin was more than offset by a lack of sales leverage on operating expenses.”  

Frederic Cumenal, chief executive officer, said, “As expected, this was a difficult quarter in terms of both sales and earnings growth. We faced numerous challenges, including continued pressure from foreign tourist spending in Europe, the U.S. and Asia, particularly in Hong Kong. However, we are continuing to take actions that are intended to strengthen sales growth with local customers in the U.S. and around the world.”