NEW YORK – Tiffany & Co.’s challenging holiday season persisted into the rest of the fourth quarter, but it’s forecasting slight growth for the year ahead as things get better from here.
Same-store sales – a key gauge of retail success – were flat on a constant currency basis, just shy of analysts’ average estimate for a 0.1 percent gain.
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Key insights
The jeweler had already warned its Christmas-period performance came short of the luxury jeweler’s own expectations, so the mixed news on Friday shouldn’t have come as too much of a surprise. Executives have said a shortfall in international tourism spending was partially to blame. These tourists, mainly from mainland China, have long propped up luxury shopping, and their slowdown in purchases have prompted concerns that a reliable customer base is faltering. CEO Alessandro Bogliolo reiterated that “softer trends in the second half of the year reflected, in part, what we believe were external challenges and uncertainties.” Fortunately for shareholders, it gets better from here. The company – which its CEO says is “still in early stages of a journey to achieve long-term sales, margin and earnings growth” – sees single-digit growth in earnings per share and sales ahead this year.
The company reported sales of $4.4 billion in 2018, compared with $4.2 billion one year prior. Profit for the year was $586.4 million, an increase from $370.1 million in 2017. Earnings per diluted share in 2018 totaled $4.75, compared with $2.96 the previous year.
The company noted that it incurred $146.2 million in tax expenses in 2017 related to federal tax changes.
The company also increased its employee count from 13,100 in 2017 to 14,200 in 2018.
Market reaction
Tiffany shares fell 2.8 percent in New York, the biggest drop in almost two months. The shares had gained 24 percent so far in 2019 through Thursday’s close, outpacing the S&P 500’s rise.
Kim Bhasin is a reporter for Bloomberg News. PBN contributed to this article.
