NEW YORK – Tiffany & Co.’s holiday performance came short of the luxury jeweler’s own expectations. The results are another sign that the Christmas season was not the smash hit that some hoped for in the U.S. stumbling retail sector.
Same-store sales, a key retail metric, were flat in the last two months of 2018, excluding the impact of foreign exchange, said the company, adding it had called for modest growth. Tiffany now sees fiscal 2018 earnings at the lower end of its previous outlook.
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The company said that worldwide net sales declined 1 percent to $1.04 billion and comparable sales declined 2 percent year over year for the holiday season.
Key insights
Tiffany’s challenging environment actually started months before Christmas. In November, CEO Alessandro Bogliolo reported lower spending by tourists, a key demographic for luxury brands. The holiday shortfall was mainly due to lower sales to tourists, primarily Chinese, and softening demand in the U.S. and Europe, the CEO said Friday. The results reinforce an emerging narrative in U.S. retail. Forecasters entered the critical holiday period expecting one of the best Christmas seasons in recent memory, but after a strong Black Friday weekend, retailers including Macy’s Inc. and Signet Jewelers Ltd. reported traffic slowed. There were a few bright spots in Tiffany’s report: strong sales in mainland China and solid results in Japan.
Market reaction
Shares dropped 2.1 percent to $83.49 in light trading, before the U.S. markets opened Friday.
Kim Bhasin is a reporter for Bloomberg News.
