Tourist Slowdown Hits Tiffany Revenue

RAPAPORT... Tiffany & Co's shares dropped 12% Wednesday after diminished spending by Chinese tourists led to weaker-than-expected sales. Comparable-store sales - at branches open for at least a year - grew 3% in the third fiscal quarter ending October 31, but analysts had predicted 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 in renovating its New York flagship store. The devaluation of the Chinese yuan against the dollar amid a tariff dispute with the US has restricted Chinese consumers' buying power overseas. Chinese visitors to the US and Hong Kong spent less money during the quarter than the jeweler had expected, with local demand supporting overall growth, Tiffany CEO Alessandro Bogliolo explained. Revenue for the Americas increased 5% to $442 million for the period, while sales in Asia Pacific rose 4% to $294 million, buoyed by local consumer spending in the county. Proceeds in Japan grew 2% to $142 million. "We believe we have substantial growth opportunities to pursue as a geographically diversified luxury brand and are not distracted by external factors, such as the negative effects of a strong US dollar or fluctuations in tourist spending," Bogliolo added. Revenue climbed 9% to $3.1 billion for the first nine months of 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 in the high single-digit percentages, after adjusting it upward in August. Image: A portion of Tiffany's 2018 holiday window. (Tiffany)