Tiffany Secret: ‘not distracted by external factors!’

Tiffany net sales rose 10% &

Net earnings rose 24% in 9M

Tiffany & Co reported its financial results for the three months-Q3 and nine months-year-to-date (9M), ended October 31, 2018. Management attributed sales growth in the third quarter to higher spending by local customers in all regions, partly offset by lower spending attributed to foreign tourists, primarily Chinese, in certain regions.

Planned higher strategic investment spending in the quarter and year-to-date, which is intended to support long-term sustainable sales growth, negatively impacted earnings; higher gross margins and lower effective tax rates had positive effects on net earnings. Management maintained its net earnings outlook for the full year ending January 31, 2019 that is FY2018.

According to the report on Q3, worldwide net sales increased 4% to $1.0 billion, reflecting growth in all regions and in most product categories; comparable sales rose 2%. 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 increased 5% and 3%, respectively.

Net earnings declined 5% to $95 million, from $100 million a year ago; net earnings per diluted share declined 4% to $0.77, from $0.80 a year ago.

Upon focussing year-to-date, worldwide net sales rose 10% to $3.1 billion, due to increased sales in all regions and product categories; comparable sales rose 7%. On a constant-exchange-rate basis, worldwide net sales and comparable sales increased 9% and 6%, respectively.          Net earnings rose 24% to $382 million, from $308 million a year ago; net earnings per diluted share rose 25% to $3.08, from $2.46 a year ago.

Alessandro Bogliolo, Chief Executive Officer, said, “It is worth noting that in the third quarter our sales attributed to local customers continued to grow at a strong rate worldwide and were positive in every region, with particularly strong growth in mainland China.

Jewelry volumes also increased in the quarter and year to date. This resulted in mid-single-digit net sales growth in the quarter and even higher growth year-to-date, despite lower-than-expected spending in the third quarter attributed to Chinese tourists in the U.S. and Hong Kong and lower wholesale travel-retail sales in Korea.

We are encouraged with our strategic progress on a global basis and with customers’ reactions to our evolved brand message, product innovation and in-store initiatives. We recently completed the global launch of Paper Flowers, a floral collection in platinum and diamonds, introduced in the Americas Tiffany True, an innovative engagement ring design, and customers appreciate our expanded offerings of high jewelry and product personalization.

Our full year outlook is unchanged. We believe we have substantial growth opportunities to pursue as a geographically-diversified luxury brand and are not distracted by external factors, such as the negative effects of a strong U.S. dollar or fluctuations in tourist spending. Our teams are truly excited about the activities planned for the holiday season and are deeply committed to achieving the long-term growth potential of this legendary brand.”