Tiffany Sales Fall as Tourist Spending Slows

RAPAPORT… Sales at Tiffany slipped in the second quarter, as
purchases by foreign tourists decreased in the Americas and Asia Pacific.

Revenue fell 3% to $1.05 billion year on year in the three
months ending July 31, while comparable-store sales — at branches open for at
least a year — slipped 4%, the jeweler said Wednesday. Profit dropped 6% to
$136.3 million.

Foreign tourists spent less in the US and
Asia, even as local purchasing in China
strengthened. Revenue for the Americas slid 4% year on year to $455 million,
and in Asia Pacific fell 1% to $298 million as softness in the Hong Kong market outweighed strong growth in China, Tiffany noted. Sales in Japan remained flat at
$155 million.

“As with the first quarter, we are encouraged in the second
quarter by sales growth attributed to our local customer base globally, which
was again led by double-digit growth in mainland China,” Tiffany CEO Alessandro
Bogliolo said.

Bogliolo also noted sales were affected by continued
business disruptions in the Hong Kong market as ongoing political
demonstrations plague the municipality’s luxury sector. Additionally, currency-exchange
losses due to the devaluation of the yuan against the dollar amid the US-China
tariff dispute weighed on revenue.

Tiffany has maintained its full-year profit forecast for
fiscal 2019, with net earnings expected to increase by a low-to-mid-single-digit
percentage. Sales will grow by a low-single-digit percentage, it predicted.

Image: A Tiffany store in Hong Kong. (Shutterstock)