NEW YORK – Tiffany & Co. posted quarterly sales that missed projections as concerns about foreign tourist spending persisted. The shares fell as much as 3.7% in early trading.
- Same-store sales, a key retail metric, fell 3% globally year over year, excluding currency swings, Tiffany said Wednesday. Analysts had estimated a 1.5% drop, according to Consensus Metrix.
- Profit for the second quarter totaled $136.3 million, a 5% decline year over year. Earnings per diluted share were $1.12, compared with $1.17 in the second quarter of 2018.
- Revenue totaled $1 billion for the quarter, a decline from $1.1 billion one year prior.
- It was more of the same last quarter for the jeweler, which has cited dramatically lower spending by international tourists to the U.S. over the past several periods as it tries to attract travelers despite a strengthening dollar and trade tensions between the United States and China.
- These shoppers are a crucial source of sales for Tiffany’s stores, including the flagship in New York. Lower spending by foreign tourists hurt revenue in both the U.S. and Asia-Pacific markets, and business in Hong Kong was disrupted by ongoing protests there, the company said.
- CEO Alessandro Bogliolo says he’s continuing to focus on the strategies he can control, such as marketing and operations. The brand has realigned to appeal to younger shoppers through its advertising and went on a multiyear hiring spree to integrate itself deeper into the diamond business. The company is working to accelerate new product introductions and keep a visible profile, Bogliolo said.
- There was a bright spot – same-store sales in Asia grew 1%, excluding currency swings, compared with the 0.9% drop projected by analysts. Bogliolo said Wednesday the gain was driven by growth in mainland China.
- Tiffany shares fell as low as $79.62 in premarket trading. They had risen 2.7% this year through Tuesday’s close, underperforming the benchmark S&P 500 Index.
Kim Bhasin is a reporter for Bloomberg News.
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