NEW YORK – Alessandro Bogliolo, Tiffany & Co.’s new CEO, is getting a boost from China as he pursues a turnaround of the 180-year-old jewelry brand.
The company reported a $100.2 million profit for the quarter ended Oct. 31, a 5.4 percent increase year over year from the same period last year.
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Same-store sales increased 2 percent in the Asia-Pacific region last quarter, compared with a 1.4 percent decline predicted by analysts. The company pointed to strong growth in mainland China for fueling the sales.
Bogliolo, who was hired earlier this year after hedge fund activist Jana Partners pushed for changes, has rolled out new designs and stepped up marketing. China’s luxury market, which had suffered under the nation’s crackdown on corruption, is bouncing back as people are making high-end purchases again, said Brian Yarbrough, an analyst at Edward Jones & Co.
“Asia was a big surprise,” he said. “Everyone is positive about China, but this is above what everyone was thinking.”
Still Tiffany has seen less of an impact in other regions, where same-store sales didn’t keep pace last quarter. They fell 8 percent in Europe and were flat in North America.
“The continued lack of sales growth” is worrisome, Yarbrough said. “We still haven’t seen a turn in the business” where comparable sales are accelerating across the board, he said.
Bogliolo said in a statement that the results “marginally exceeded our expectations,” and that Tiffany has the potential to “drive higher operating margins and earnings growth.”
Earnings amounted to 80 cents a share, topping the 76 cent estimate of analysts. Net sales came in at $976.2 million, well ahead of the $957 million projected. Net sales were $949.3 million one year prior.
Tiffany shares were little changed in early trading, slipping 0.4 percent to $93.63 in early trading on Wednesday. They had already gained 21 percent so far this year, lifted by comeback hopes.
Globally, same-store sales growth was break-even, when holding currency constant. Analysts predicted a 0.1 percent decline, according to Consensus Metrix.
The New York-based company also maintained its sales and earnings guidance for the year.
Stephanie Wong is a reporter for Bloomberg News.
