Tiffany & Co. received a boost from improved retail demand in Asia during its third fiscal quarter, as the company seeks to return to growth this holiday season.
Group sales rose 3% year on year to $976.2 million in the three months that ended October 31, with a strong performance in the fashion-jewelry and solitaire categories, as well as in high and fine jewelry. Comparable-store sales slipped 1%, but profit increased 5% to $100.2 million.
“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,” said Alessandro Bogliolo, who joined the jeweler as CEO last month.
Sales in the Americas climbed 1% to $421 million, as higher demand from local customers outweighed weaker spending by foreign tourists, the company said. Asia-Pacific revenue jumped 15% to $283 million, largely due to growth in mainland China. Sales in Hong Kong were almost flat, after three years of substantial declines, Mark Aaron, Tiffany’s vice president for investor relations, said on a conference call Wednesday.
However, revenue declined from Tiffany’s diamond wholesale business, resulting in a 26% slide in “other sales” — including both the wholesale unit and retail sales at stores in non-core regions.
In the first nine months of the fiscal year, group sales increased 2% to $2.84 billion, while comparable-store sales dipped 2%, and profit jumped 7% to $308.2 million.
Bogliolo, who previously served as CEO of Italian clothing brand Diesel, is attempting to achieve a turnaround at Tiffany outlet, after global sales fell 3% in the last full fiscal year that ended January 31. Last year’s holiday sales dropped 4% due to weak consumer spending and protests outside Trump Tower, which neighbors the retailer’s flagship Fifth Avenue store in New York.
This year, the company has looked to new strategies to attract consumers, including opening pop-up stores in key New York locations, and expanding its range of products. The jeweler recently launched a luxury collection of everyday items, and also opened a café inside the Fifth Avenue outlet.