Weak Gold Demand Hits Titan’s 1Q

RAPAPORT… Titan Company’s sales missed the retailer’s expectations in
the first fiscal quarter due to a decline in consumer demand for gold.




“Weakness in the consumer sentiment has had an impact on our
sales, also leading to recording of sales below our internal targets,” the
retailer said in an update Wednesday, referring to the three months ending June 30. The company will release its full income statement for the period at a later date.



While purchases during the Akshaya Tritiya festival — an
important season for gold buying — remained somewhat strong, the remainder of
the quarter was significantly weaker than the same period the previous year,
the company noted. The quarter saw lower demand for gold as an investment as
well as for jewelry, Titan added.



Jewelry sales also suffered on a year-on-year basis because growth
was especially strong in the same quarter a year earlier. The company brought
forward about $36.3 million (INR 2.5 billion) worth of sales to the first
fiscal quarter last year in anticipation of the new goods and services tax
(GST), which went into effect last July.



Meanwhile, Titan’s watch division had a “great quarter,” boosted
by new designs and marketing campaigns that revived consumer interest and
brought in younger customers, the company said.



The
retailer added 10 new stores for its Tanishq jewelry brand during the quarter.