Tourist Slowdown Hits Tiffany Sales

RAPAPORT... Tiffany & Co.'s shares dropped 9% in early trading Wednesdayafter diminished spending by Chinese tourists led to weaker-than-expectedsales. Comparable-store sales - at branches open for at least ayear - grew 3% in the third fiscal quarter ending October 31, but analysts hadpredicted a rise of 5.3%, according to Reuters. While total revenue climbed 5%to $1 billion, profit fell 5% to $95 million as the company invests inrenovating its New York flagship store. The devaluation of the Chinese yuan against the dollar amida tariff dispute with the US has restricted Chinese consumers' buying poweroverseas. Chinese visitors to the US and Hong Kong spent less money during thequarter than the jeweler had expected, with local demand supporting overallgrowth, Tiffany CEO Alessandro Bogliolo explained. Revenue for the Americas increased 5% to $442 million forthe period, while sales in Asia Pacific rose 4% to $294 million, buoyed by local consumer spending in the county. Proceeds inJapan grew 2% to $142 million. "We believe we have substantial growth opportunities topursue as a geographically diversified luxury brand and are not distracted byexternal factors, such as the negative effects of a strong US dollar orfluctuations in tourist spending," Bogliolo added. Revenue climbed 9% to $3.1 billion for the first nine monthsof the fiscal year, while comparable-store sales rose 6%. Profit jumped 24% to$382 million for the period. Tiffany maintained its full-year forecast of sales growth inthe high single-digit percentages, after adjusting it upward in August. Image: Tiffany silver makeup case.