Tiffany Holiday Period Net Sales Edge Up, But Comps Down

(RTTNews) - Tiffany & Co. (TIF) reported that Worldwide net sales for the two months ended December 31, 2016 were $966 million, slightly above $961 million a year ago, with sales growth in Asia-Pacific and Japan largely offset by lower sales in the Americas and Europe. worldwide comparable store sales declined 2%.

On a constant-exchange-rate basis that excludes the effect of translating foreign-currency-denominated sales into U.S. dollars, worldwide net sales for the holiday period rose 1% from the prior year and comparable store sales declined 1%. There were no significant variations in performance among jewelry categories.

Frederic Cumenal, chief executive officer, said, "These overall holiday period sales results were somewhat lower than we had anticipated, but we continue to benefit from a favorable gross margin and prudent expense management. Although we do not anticipate any significant improvement in 2017 to the macroeconomic challenges that we faced this year, we continue to focus on our initiatives to enhance our stores and our customers' experience, and to add newness to our product assortment, while maintaining effective marketing communications and a well-developed supply chain."

In the Americas, both total sales of $483 million and comparable store sales were 4% below the prior year. On a constant-exchange-rate basis, total sales declined 4% and comparable store sales declined 3%.

In the Asia-Pacific region, total sales increased 7% to $200 million and comparable store sales declined 4%. On a constant-exchange-rate basis, total sales rose 9% and comparable store sales declined 3%. It noted strong growth in retail sales in China and in wholesale sales in Korea, but softness in most other markets throughout the region.

In Japan, total sales rose 16% to $143 million and comparable store sales rose 21%, which management attributed to higher spending by local customers. On a constant-exchange-rate basis, total sales increased 8% and comparable store sales rose 12%. Strong retail sales growth was partly offset by lower wholesale sales.

In Europe, total sales of $119 million were 10% below the prior year and comparable store sales declined 11%. On a constant-exchange-rate basis, total sales were equal to the prior year and comparable store sales were 4% below the prior year.

For the full 2016 fiscal year, it expects earnings per diluted share to decline by no more than a mid-single-digit percentage on a GAAP basis, as well as on an adjusted basis; and continues to expect worldwide net sales declining by a low single-digit percentage from the prior year.

The Company expects to report its fourth quarter and full year results on Friday March 17th before the market opens.

Separately, Tiffany announced that Reed Krakoff will join Tiffany in the new position of Chief Artistic Officer, effective February 1. Reed will direct design for TIFFANY & CO. brand jewelry, as well as luxury accessories, and lead the brand's overarching artistic and design vision with respect to stores, e-commerce, marketing and advertising.