Lower-than-expected U.S. sales caused Tiffany & Co. to post third-quarter results that executives admitted were “mixed.”
U.S. sales were “disappointing,” vice president of investor relations Mark Aaron said on a conference call following the release of financial results.
The company saw “pronounced weakness in the New York area,” as well as in other tourist-related markets, Aaron said. Sales to domestic customers were “flat,” because of difficult comps and “continued softness in broader consumer spending trends.”
On a category basis, Aaron reported:
– Continued softness in the fine jewelry segment.
– Growth in high-end statement jewelry.
– Engagement ring sales performed well in Japan and Europe but were soft elsewhere.
– Strong growth in fashion gold jewelry, fueled by the Tiffany T collection.
– Good initial results from Tiffany CT60 and East West watches.
Worldwide sales rose 4 percent on a constant currency basis but fell 2 percent on a reported basis, to $938 million. Comp sales rose 1 percent.
Net earnings declined 9 percent to $91 million, compared to $99 million last year, partly reflecting the negative effects from the strong U.S. dollar.
Sales in the Japanese, European, and Asia-Pacific markets all grew, but sales fell in the Americas.
The results led the company to trim its profit expectations, and it’s now forecasting a 5–10 percent drop in earnings per share for the year.