(IDEX Online) – Tiffany & Co. reported that worldwide net sales increased 3 percent to $976 million but comparable store sales declined 1 percent for its third quarter ending October 31, reflecting sales growth in most regions, as well as increased sales in the fashion jewelry and the high, fine & solitaire jewelry categories.

 

In the nine month period, worldwide net sales were $2.8 billion, 2 percent above the prior year, while comparable store sales declined 2 percent. Net earnings increased 5 percent to $100 million from $95 million in the prior year.

 

In the year-to-date, on a constant-exchange-rate basis, worldwide net sales increased 3 percent while comparable store sales declined 1 percent. Net earnings increased 7 percent to $308 million, compared with $288 million last year.

Alessandro Bogliolo, Chief Executive Officer, who joined Tiffany in October, said, "These latest financial results marginally exceeded our expectations, but I believe that Tiffany has the medium to long-term potential to achieve meaningful comparable store sales growth and drive higher operating margins and earnings growth. Looking forward, we will increasingly capitalize on the strength of the Tiffany & Co. brand with stronger organizational focus on innovation in product, digital, communication and the customer experience."

 

In the Americas, total sales of $421 million in the third quarter were 1 percent above the prior year and total sales of $1.3 billion in the year-to-date were approximately equal to the prior year; comparable store sales increased 1 percent and declined 1 percent in the third quarter and year-to-date, respectively.

 

Management noted that there were no significant geographic variations across the region, and attributed the overall sales softness to lower spending by foreign tourists. On a constant-exchange-rate basis, total sales rose 1 percent in the third quarter and were approximately unchanged in the year-to-date, with comparable store sales approximately unchanged and down 1 percent in those periods, respectively.

 

In the Asia-Pacific region, total sales rose 15 percent to $283 million in the third quarter and increased 8 percent to $775 million in the year-to-date; comparable store sales rose 2 percent and declined 2 percent in those respective periods. Total sales growth resulted from increased wholesale and retail sales; on a comparable store sales basis, strong growth in mainland China contrasted with declines in most other countries, which management attributed largely to lower Chinese tourist spending. On a constant-exchange-rate basis, total sales increased 14 percent in the third quarter and 8 percent in the year-to-date, and comparable store sales increased 2 percent and declined 2 percent, respectively.

 

In Japan, total sales of $139 million in the third quarter and $407 million in the year-to-date were 8 percent and 3 percent below the respective prior-year periods; comparable store sales declined 8 percent in the third quarter and 2 percent in the year-to-date. Sales declines in both periods largely reflected the negative effect of a weaker yen versus the dollar. On a constant-exchange-rate basis, total sales in the third quarter were equal to the prior year and year-to-date total sales were 2 percent above the prior year; comparable store sales in the third quarter were equal to the prior year while year-to-date sales increased 3 percent.

 

In Europe, total sales increased 5 percent in the third quarter to $110 million and rose 2 percent in the year-to-date to $318 million; comparable store sales declined 3 percent in both periods. Management noted total retail sales growth across most of continental Europe, and a decline in sales in the U.K. (which had achieved strong growth in last year's third quarter following the weakening of the British pound). On a constant-exchange-rate basis, total sales increased 1 percent in the quarter and 3 percent in the year-to-date due to the effect of new stores; comparable store sales declined 8 percent and 2 percent, respectively.

 

Other sales of $23 million in the third quarter were 26 percent below the prior year while year-to-date sales of $84 million were 18 percent above the prior year, primarily reflecting a decline in wholesale sales of diamonds in the quarter and an increase in the year-to-date; comparable store sales increased 7 percent in the quarter and were unchanged in the year-to-date.

 

Tiffany has opened seven company-operated stores in the year-to-date and closed five. At October 31, 2017, the company operated 315 stores (125 in the Americas, 86 in Asia-Pacific, 54 in Japan, 46 in Europe, and four in the UAE), versus 313 stores a year ago (125 in the Americas, 85 in Asia-Pacific, 55 in Japan, 43 in Europe, and five in the UAE).

Other highlights:

 

In its fiscal 2017 outlook, the retailer said that management's outlook for fiscal 2017 calls for:

 

Worldwide net sales increasing over the prior year by a low-single-digit percentage as reported and on a constant-exchange-rate basis and

 

Net earnings per diluted share increasing by a high-single-digit percentage over 2016's earnings per diluted share of $3.55 and by a mid-single-digit-percentage over 2016's earnings per diluted share (excluding charges) of $3.75.