Titan Banks On Wedding Season To Maintain Jewellery Sales Guidance In Q3
Titan indicates a 11 percent growth in jewellery sales in the third quarter, in line with its revised projections for H2 FY20.
Sales of ornaments have revived in the three months through December on the back of festive demand and the ongoing wedding season, according to India’s largest branded jewellery maker.
In its update for the third quarter, Titan Company Ltd. said it witnessed “reasonable growth in the festive season”, with retail sales picking up at the start of the three-month period owing to the wedding season—between November and January. It indicated a 11 percent growth in jewellery sales in the period, in line with the company’s revised projections for the second half of 2019-20.
The jewellery segment, which contributes nearly 80 percent to the company’s revenue, reported a sharp fall in sales in the second quarter as gold prices surged to a six-year high. It cut the segment’s sales guidance for the second half of FY20 to 11-13 percent from 20 percent during an earnings call for the quarter ended September, citing high prices of the yellow metal and slowing discretionary spending.
Sales in all divisions were partly impacted by forced closures due to protests in the North East and few other parts of India, the company said, adding that it had opened 34 Tanishq stores and 8 Mia stores so far this year.
Lower discretionary spending on account of “general economic slowdown” took its toll on Titan’s other key segments. Sales in its watches segment, which contributes nearly 17 percent to the company’s revenue, remained largely unchanged even as industry sales declined by around 4 percent. The company attributed the trend to poor customer sentiment in trade channels and e-commerce.
The company said that its eyewear segment, its smallest, grew by around 2 percent in the third quarter. That, it said, was due to “heightened competition and disruption in sales due to nationwide protests”.