Tiffany Declines After Doldrums Persist in Most of the World
(Bloomberg) -- 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 the most in almost 10 months Friday. 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 Chief Executive Officer 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.
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.
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.
Excluding some items, profit in the period ended Jan. 31 amounted to $1.67, topping the average estimate of $1.64.
“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.
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