Tiffany & Co. (NYSE:TIF) released its second-quarter results before the opening bell on Aug. 28. While the company's earnings beat estimates, revenue was hurt by low foreign tourist spending in the U.S. as well as the protests in Hong Kong, its fourth-largest market.
Snapshot of the quarter
The New York-based luxury jeweler posted earnings of $1.12 per share, topping estimates of $1.04. Revenue decreased 3% form the prior-year quarter to $1.05 billion, just shy of expectations of $1.06 billion.
Worldwide comparable store sales fell 4%, which was greater than the 1.3% decline analysts were anticipating.
Reflecting on the company's performance, CEO Alessandro Bogliolo said:
"With the tough comparison to last year's strong performance in the first half behind us, and in spite of the headwinds of weak demand from foreign tourists, currency exchange rate pressures and continuing business disruptions in Hong Kong, we are actively managing what is in our control and positioning our Brand to win - accelerating new product introductions and keeping a visible profile."
In America, sales retreated 4% to $455 million, while comps declined 4%. The company attributed the decline to lower spending by foreign tourists and local customers.
In the Asia-Pacific region, sales declined 1% to $298 million. Comps dipped 3% year over year. While overall demand in China was strong, Tiffany said growth was soft in Hong Kong.
Total net sales in Japan stood at $155 million, which remained unchanged from the year-ago quarter. Same-store sales fell 1%.
In Europe, sales were down 4% to $116 million, while comps declined 6%.
Efforts to enhance experience
Going forward, Tiffany is concentrating on enhancing its brand, improving the omni-channel experience, cementing its penetration in primary markets and increasing operational efficiency. The company is focused on enriching the in-store experience while replenishing the product line.
For fiscal 2019, Tiffany is guiding for low single-digit global net sales growth. The company expects net diluted earnings per share to grow at a low-to-mid-single-digit percentage.
Disclosure: I do not hold any positions in the stocks mentioned.
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