Tiffany Rises on Earnings Beat; Quarterly Sales Miss Estimates

(Bloomberg) -- Tiffany & Co. posted quarterly sales that missed projections as concerns about foreign tourists’ spending persisted. The shares rose in premarket trading in New York after earnings beat analysts’ estimates.

• Same-store sales, a key retail metric, fell 3% globally, excluding currency swings, Tiffany said. Analysts had estimated a 1.5% drop, according to Consensus Metrix.

Key Insights

• 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 U.S. and China.
• These shoppers are a crucial source of sales for Tiffany’s brick-and-mortar shops, including the flagship in New York. Lower spending by foreign tourists hurt sales in both the U.S. and Asia-Pacific markets, the company said.
• Chief Executive Officer Alessandro Bogliolo has focused on the strategic elements 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.
• Earlier this month, Tiffany said it would enter India for the first time through a partnership with Reliance Brands. It will open stores in several cities to court the nation’s rising middle class.

Market Reaction

• Tiffany shares gained as much as 5.2% in premarket trading. They have risen 2.7% this year through Tuesday’s close, underperforming the benchmark S&P 500 Index.

Get More

• For more on the results, click here.
• For the company statement, click here.

To contact the reporter on this story: Kim Bhasin in New York at kbhasin4@bloomberg.net

To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Lisa Wolfson, John Lauerman

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