Tiffany reports stronger first-half performance

Return to Tiffany Love bracelet in 18 karat rose gold with diamonds

Tiffany & Co said its global net sales for the first half of 2017 reached US$1.9 billion, up 2 percent from the prior year on the back of stronger diamond sales as well as improved business in the Asia-Pacific region.

Net earnings rose 8 percent to US$208 million during the period in review while worldwide net sales in the second quarter increased 3 percent to US$960 million.

Apart from an increase in wholesale sales of diamonds and better sales in Asia Pacific, Tiffany also cited a boost in e-commerce sales. It further reported, “Overall, growth in fashion and designer jewellery sales contrasted with softness in other jewellery categories.”

Michael J. Kowalski, chairman of the board and interim CEO, said, “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.”

In the Americas, total sales rose 1 percent to US$439 million in the quarter and declined 1 percent to US$830 million in the first half; comparable store sales declined 1 percent and 2 percent, respectively. Results were geographically mixed across the region and management attributed sales softness primarily to lower spending by foreign tourists.

Total sales in the Asia-Pacific region, meanwhile, reached US$235 million in the quarter and US$492 million in the first half, up 2 percent and 5 percent, respectively, from the previous year; comparable store sales declined 7 percent and 5 percent, respectively. Total sales growth was due to increased wholesale sales, as well as new stores, while the decline in comparable store sales included strong growth in mainland China that was more than offset by softness in other countries, which management attributed to lower foreign tourist spending.

In Europe, total sales of US$114 million in the quarter were 3 percent above the prior year and sales of US$208 million in the first half were equal to the prior year, reflecting increased wholesale sales and the effect of new stores; comparable store sales declined 2 percent in both periods. Retail sales results were geographically mixed across the region.

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