NEW YORK – Tiffany & Co. is still trying to regain its luster.
The key metric of same-store sales at the 181-year-old jeweler missed analysts’ estimates in most of its regions last quarter, driving the stock down Friday the most in almost 10 months. Tiffany has been trying to reverse a lengthy sales slump.
The result is a disappointment for investors after Tiffany posted strong holiday sales under new CEO Alessandro Bogliolo, who came aboard last year. The former Diesel and Bulgari executive seeks to reinvigorate Tiffany’s jewelry lines to build excitement and attract younger shoppers. The brand drew attention over the winter with a quirky set of luxury home decor items that included $450 rulers and $300 yo-yos.
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Tiffany’s turnaround plan includes “more distinctive newness,” which will come through introducing more items more often, Bogliolo said on a conference call after the results were released. The company is also working to bolster e-commerce and streamline back-end operations, he said.
Worldwide in the fourth quarter, same-store sales rose 1 percent, when holding currency constant. Analysts estimated a gain of 2.7 percent. On that basis, sales climbed 4 percent in the Americas region, short of the 5 percent gain projected. The New York-based company reported growth also in the Asia-Pacific region, though said currency translations dented sales.
Full-year, 4Q results
Net sales for the New York-based luxury jewelry and goods manufacturer – which has a production facility in Cumberland – for fiscal 2018 ended Jan. 31 grew 4.2 percent to $4.2 billion, even as net income declined 17 percent to $370.1 million. Earnings per diluted share totaled $2.96, compared with $3.55 in the year prior.
In its earnings release, the company noted that the U.S. Tax Cuts and Jobs Act resulted in a $146 million charge in the fourth quarter. Removing the effects of that one-time charge, as well as a $38 million impairment charge in fiscal 2017, the company calculated that net income for fiscal 2018 totaled $516 million, compared with $470 million in fiscal 2017.
Profit in the fourth quarter of fiscal 2018 fell 60.8 percent year over year to $61.9 million, or 50 cents per diluted share, as the company was forced to take an income tax provision of $239.5 million, compared with $88.7 million in the same year-earlier period. Net sales increased 8.5 percent year over year to $1.3 billion.
Home goods
High-end and designer jewelry lines did well in the quarter, the company said. Engagement jewelry increased fractionally in the period, but was down for the year, while home goods saw double-digit growth. Bogliolo called that a “very meaningful test” for Tiffany because shoppers reacted well to the new kinds of products developed under Chief Artistic Officer Reed Krakoff.
Tiffany shares fell as much as 7.5 percent to $95 in New York, the biggest intraday slide since May. They had dropped 1.2 percent this year through Thursday’s close.
Under the creative guidance of Krakoff, the former Coach fashion designer, Tiffany hopes to modernize its legacy label. He designed a restaurant for the jeweler’s famed Fifth Avenue flagship store and developed the Everyday Objects home line.
The company reiterated its fiscal 2018 forecast of a mid-single-digit percentage gain in revenue, and expects same-store sales, which include its physical stores, online shop, and catalogs, to increase by a low-to-mid single digit.
“We will only be truly satisfied when we create greater excitement for our customers and also generate growth that reflects the full potential of our brand,” Bogliolo said in a statement.
Kim Bhasin is a Bloomberg News staff writer.
