Tiffany & Co. said that its U.S. sales grew in its fourth quarter (ended Jan. 31), driven by increased demand from local customers.
The company didn’t break out U.S. sales specifically but said that comps in the Americas region rose 4 percent (on a constant exchange basis) during the quarter, with “no meaningful geographic differences across the region.”
Worldwide comps rose 3 percent in the quarter, and worldwide net sales rose 9 percent to $1.3 billion. For the year, worldwide sales rose 4 percent while comps were flat.
On a conference call following the release of its financial results, CEO Alessandro Bogliolo said the company had undergone a strategic review and wanted to refresh its communications and merchandise as well as focus on omnichannel.
But he also said that he wanted to “dramatically improve and enhance” the company’s physical stores, calling that a “key area of investment” for the brand.
“The key for me is to inject some freshness, some newness, some excitement in the store[s]. Nowadays consumers are more demanding. It’s not enough to have a beautiful store. If you have a beautiful store, and I’ve been to it three or four times, why should I come to the store when I can buy the same product from Tiffany.com? … [We are looking for] visual merchandising and in-store presentations as a way to animate the point of sale.”
Bogliolo said the company’s pop-up stores are “a very effective way” to test new initiatives with customers.
He also called watches, and in particular women’s watches, an “absolute priority” and “a must.”
“This is a category we are putting a lot of efforts in,” he said. “It’s a category where growth and development are slow, but we are determined to go that path.”
Bogliolo added that Tiffany wants “more frequent innovation and meaningful and distinctive newness in all categories,” noting that newness fits in with the brand’s heritage: “Tiffany has always been, compared to other [luxury] brands, more inclusive, more open to innovation, less formal, and more about a joyful experience.”
He called those qualities “very much in line with the changes in the luxury experience.”
“Luxury is no longer equal to formality,” he said. “Luxury is no longer just for richer and older people. It is meaningful to a larger audience, and I think that Tiffany, because of its DNA and personality, is well-situated to chart the new course of luxury.”
Bogliolo said he hoped to bring Tiffany “into the middle of the new cultural conversation.”
He said that the company’s marketing will stress so-called millennial values like “self-expression, celebrating love in a different way, everyday use of jewelry, and strong, empowered women.”
Net earnings for the quarter came in at $62 million, a 61 percent fall from the prior year’s $158 million. Net earnings for the fiscal year were $370 million, a 17 percent fall from the prior year’s $446 million.
The decision by Tiffany executives to take questions at the end of the call was a break with tradition for the retailer—and vice president of investor relations Mark Aaron said that the company will now regularly answer questions on investor calls going forward.
(Image courtesy of Tiffany)