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Tiffany Sales Fall as Tourist Dip Worsens

Revenue down 3% in first quarter amid lower spending by Chinese visitors to Americas.
Jun 4, 2019 10:30 AM   By Rapaport News
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RAPAPORT... Tiffany & Co.’s revenue and profit dropped in the first fiscal quarter amid a continued decrease in spending by foreign tourists and a strong US dollar, it said Tuesday. 

Total revenue fell 3% to $1 billion in the three months ending April 30, while comparable-store sales — at branches open for at least a year — declined 5%. Profit slid 12% to $125.2 million.

“Our first-quarter results reflect significant foreign-exchange headwinds and dramatically lower worldwide spending attributed to foreign tourists,” said Tiffany CEO Alessandro Bogliolo. However, Tiffany noted an increase in purchasing by local customers during the period. 

The devaluation of the Chinese yuan against the dollar amid a tariff dispute with the US has weighed on the jewelry retailer’s results. The company earns money in foreign currency from its global stores, which it then converts into US dollars for reporting purposes.

Revenue for the Americas slipped 4% to $406 million for the period. Tourist sales in the region fell about 25%, with spending by Chinese visitors declining by an even greater amount. The slowdown in that segment worsened compared with the second half of 2018, executives said on an investor call Tuesday.

Sales in Asia Pacific inched down 1% to $324 million, as strong growth in mainland China was outweighed by mixed results in other markets in the region. Proceeds in Japan fell 4% to $145 million, and those in Europe dropped by the same percentage to $102 million.

Tiffany lowered its full-year profit forecast for fiscal 2019, factoring in a potential 25% tariff on jewelry the company exports from the US to China. It now expects net earnings to increase by a low-to-mid-single-digit percentage compared with the mid-single-digit percentage it previously predicted. The company maintained its outlook for sales growth in the low-single-digit range for the year.

Image: Tiffany’s New York flagship store. (Tiffany & Co.)
Tags: Alessandro Bogliolo, Rapaport News, Tiffany, Tiffany & CO., US-China trade war
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