Tiffany Sales Stall as Tourist Spending Dries Up

RAPAPORT... Sales at Tiffany & Co. were flat at $1.01 billion in thethird fiscal quarter as increases in mainland China compensated for weakspending in the US and Hong Kong. Revenue declined 4% to $422.5 million in the Americas region assales to tourists fell, while local customers also trimmed their spending, thejeweler said Thursday. Asia-Pacific sales were unchanged at $294.1 million amid"double-digit" growth in mainland China and the negative effect of protests inHong Kong. Sales rose in Japan, but fell in Europe. "Our underlying business remains healthy, with salesattributed to local customers on a global basis growing in the third quarter,"Tiffany CEO Alessandro Bogliolo said in a statement Thursday. The depreciation of the Chinese yuan currency also loweredthe sales total for the Asia-Pacific region in dollar terms. Excluding theimpact of exchange-rate fluctuation, global same-store sales rose 1%, but stillmissed analysts' estimate of a 1.4% increase, according to Reuters. Net profitslid 17% to $78.4 million due to increased costs and a higher rate of incometax. The results for the three months ending October 31 came aweek and a half after European luxury group LVMH agreed to acquire the NewYork-based retailer for $16.2 billion. The takeover will give Tiffany "support,resources and momentum" to help it grow, Bogliolo said following the deal. "We are very excited about the recently announcedtransaction with LVMH and, pending the required approvals, look forward tobecoming part of the LVMH family of exceptional luxury brands," the executiveadded Thursday. Tiffany's sales of jewelry collections were flat at $541.8million, while revenue from engagement jewelry was also stable at $276.8million. Designer-jewelry sales rose 1% to $112 million. During the first nine months of the fiscal year, total salesfell 2% to $3.07 billion, while net profit dropped 11% to $339.9 million. Image: A Tiffany story in Hong Kong. (Shutterstock)