Tiffany holiday sales fall as dollar crimps Chinese tourists' spending
(Adds CEO, analyst quote)
Jan 18 (Reuters) - Tiffany & Co tempered its yearly
profit forecast on Friday after the luxury jeweler's holiday
sales fell unexpectedly as Chinese tourists spent less globally
due to a stronger dollar and demand softened in Europe and at
Like other luxury goods firms, Tiffany relies on spending by
China's burgeoning middle class as consumer demand remains
subdued in the United States and Europe, weighed down at the
moment by uncertainties such as a partial U.S. government
shutdown and Britain's plan to exit the European Union.
During the crucial November-December period, Tiffany's
worldwide same-store sales fell 2 percent while net sales dipped
1 percent, against its expectations of modest increases.
Tiffany Chief Executive Alessandro Bogliolo blamed softer
spending globally by foreign tourists, primarily Chinese, and
"a lot of uncertainties and volatility" which may have hit
customer demand in Europe and the Americas.
"We see Chinese tourists spending abroad going down heavily,
minus 20-25, 30-35 percent, and this is in many, many countries
... in the U.S., but it's also Hong Kong and now it's spreading
to Southeast Asia," Bogliolo told Reuters. "For sure it's due to
the exchange rate."
Shares of Tiffany, which have fallen 22 percent in the past
12 months, were up 3 percent in morning trade.
"Tourism is the culprit for TIF's underwhelming holiday
numbers, but this is not a surprise to us given the stronger
dollar," Jefferies analyst Randal Konik said.
Bogliolo also said issues such as Brexit, protests in France
and the U.S. shutdown, now in its 28th day, "makes me more
cautious" about sales and earnings forecasts, but he expects a
couple of "very tough" quarters.
A slowdown in spending by Chinese tourists prompted Tiffany
to shy away from raising its yearly profit targets in November.
On Friday, it said it expects full-year earnings
for fiscal 2018 around the lower end of its estimated range of
between $4.65 and $4.80 per share.
Still, customer demand at Tiffany stores in mainland China
remained strong during the holiday season, the company said.
Consumer Edge Research's David Schick said that strength
"supports the view of continued brand relevance, which is
important to the long-term story."
The New York-based jeweler's holiday period results mirror
similar reports from other U.S. retailers. Macy's, Kohls
and others reported disappointing results even as
overall shopping during the 2018 U.S. holiday season reached a
Smaller U.S.-based jeweler Signet on Thursday
reported lower holiday period sales and slashed its full-year
profit forecast, driving its shares more than 20 percent lower.
Tiffany, known for its engagement rings and robin's egg blue
boxes, said holiday sales of engagement and designer jewelry
fell 3 percent and 8 percent, respectively.
Annual sales should rise 6 to 7 percent, the company said.
It had earlier estimated growth in the high single percentage
For the year ending January 2020, Tiffany expects earnings
per share to rise in the mid-single digits and net sales to grow
in low-single digits.
(Reporting by Nivedita Balu and Aishwarya Venugopal in
Bengaluru and Melissa Fares in New York; Editing by Sai Sachin
Ravikumar and Susan Thomas)
First Published: 2019-01-18 13:51:12
Updated 2019-01-18 19:10:57
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