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NEW YORK (AP) – Tiffany & Co. has surpassed earnings expectations for the first quarter, but the number of tourists in its US stores, particularly from China, has slowed sales and the company has reduced its forecast for the first quarter. 'year.
Tiffany said earlier this year that holiday sales had been penalized by lower spending by Chinese tourists and that this trend had accelerated in the first three months of the year.
The strong dollar has made Tiffany jewelry even more expensive for Chinese tourists. President and CEO Alessandro Bogliolo said the brand did not feel any "negative sentiment" from Chinese buyers, here or in China, in a context of increased trade.
Revenues slipped 3 percent to $ 1 billion, just below Wall Street's expectations, according to a survey by Zacks Investment Research.
The company earned $ 125.2 million, or $ 1.03 per share, which is 2 cents better than Wall Street expected.
Worldwide store sales decreased by 5%; at constant exchange rates, net sales are equivalent to last year and comparable sales decreased by 2%.
"Our first quarter results reflect significant hurdles on the foreign exchange market and a dramatic drop in global spending by foreign tourists," Bogliolo said in a statement.
In the Americas, total net sales decreased by 4% and comparable sales by 5%. At constant exchange rates, total net sales and comparable sales decreased by 4%.
In Asia-Pacific, total net sales decreased 1% and same-store sales decreased 5% due to currency translation; at constant exchange rates, total sales increased 3% and same-store sales were the same as last year. Mainland China maintained strong growth but mixed results in other markets.
In Japan, total net sales decreased by 4% and comparable sales by 4%; At constant exchange rates, total sales and comparable sales were identical to those of the previous year. In Europe, total net sales decreased by 4% and comparable sales by 7%. at constant exchange rates, total sales and comparable sales increased by 4% and 1% respectively.
Net earnings per share is expected to increase by less than 5 percent, the company said on Tuesday, citing higher prices on jewelry exported to China. Previously, he had forecast a percentage increase of less than 5%.
In an interview with the Associated Press on Tuesday, Bogliolo said the company was not planning to raise the prices of its jewelry in China because of higher tariffs and that it was going to absorb the costs. "We do not want to penalize" Chinese customers, he added.
Investors have neglected the decline in sales after the company announced that it would increase its quarterly dividend by 5%. Shares rose by nearly 4% in the afternoon.
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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a report on Zacks actions on TIF at https://www.zacks.com/ap/TIF.
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