Tiffany & Co. continued to feel the fallout from COVID-19, as its sales in mainland China rose dramatically during its second quarter (ended July 31), while sales in the Americas region continued to fall.
Sales in mainland China—the first country hit by COVID-19, as well as the first to recover from it—rose 80% over last year. In May, they rose 90%.
However, sales to the Americas region—which includes the United States, where COVID-19 continues to be a serious problem—fell 45%. The company says that 90% of its U.S. stores are full or partially opened, though they were closed briefly following nationwide protests sparked by the death of George Floyd.
Other markets still saw declines, though not as bad as the Americas regions. In both Japan and Europe, they fell 28% in the second quarter.
Worldwide net sales for the quarter fell 29%, and comps fell 24%. That is still a better result than its first quarter, where sales plummeted 45%. The company even managed to eke out a $32 million profit for the quarter—which was 77% below the prior year’s $136 million. It has also registered a $33 million loss for the first half.
E-commerce has now become a major part of the company’s sales, with U.S. e-commerce sales up 122%. Global e-commerce sales are now approximately 15% of its total sales.
Going forward, the company expects COVID-19 to continue to be an issue until at least January 2021, it said in its annual 10-Q.
Another thing that has been impacted by COVID-19 is the brand’s pending sale to LVMH, announced last year. The company has yet to received regulatory clearance from four national antitrust authorities, possibly because of the COVID-related disruptions.
The sale was originally scheduled to close by the middle of this year. Tiffany has since moved the closing date up to Nov. 24, which the agreement permits. However, in what some took as a possibly ominous sign, LVMH has reserved the right to object to the date extension, Tiffany said in an SEC filing.
In June, reports appeared that LVMH’s board was beginning to have second thoughts about the deal “amid a deteriorating situation in the U.S. market.”
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