Tiffany & Co. declines as sales in Europe, North America disappoint

Bloomberg

Tiffany & Co. fell the most in more than two months after stagnant sales worldwide showed the jeweller’s efforts with new designs and store renovations has yet to resonate with more customers.
Same-store sales—a key retail metric—were flat globally and in North America last quarter, while they
tumbled 8 percent in Europe, the company said. The results sent the shares down as much as 3.7 percent in New York trading.
“The continued lack of sales growth” is worrisome, said Brian Yarbrough, an analyst at Edward Jones & Co. “We still haven’t seen a turn in the business” where comparable sales are accelerating across the board, he said.
Chief Executive Officer Alessandro Bogliolo, hired earlier this year after hedge fund activist Jana Partners pushed for changes, has rolled out new products, opened a cafe at its flagship Fifth Avenue store in New York and stepped up marketing.
He said the results “marginally exceeded our expectations,” and that Tiffany has the potential to drive earnings growth and profitability.
Tiffany shares fell as low as $90.55 in New York trading, marking their biggest intraday decline since September 22.
Earnings amounted to 80 cents
a share, topping the 76-cent estimate
of analysts. Net sales came in at
$976.2 million, well ahead of the
$957 million projected.
Brian Tunick, an analyst at RBC Capital Markets, said that while same-store sales were flat in North America, they had at least stabilised after multiple quarters of declines.
However, sales in Europe were “disappointing, particularly compared to strong results European luxury peers have been reporting,” he said.
Bogliolo addressed that on a conference call with investors after the earnings were released.
The New York-based company also maintained its sales and earnings guidance for the year.