Tourist Slump Damages Tiffany's Holiday

RAPAPORT... Sales at Tiffany & Co. fell during the holiday season, amidreduced spending by Chinese tourists, while economic uncertainties affecteddemand in the Americas and Europe. "Overall holiday sales results came in short of ourexpectations, which had called for modest year-over-year growth," Tiffany CEOAlessandro Bogliolo said Friday. Global sales slipped 1% to $1.04 billion for theNovember-December period, while comparable store sales - those at branches open for at leasta year - fell 2%. However, on a constant-exchange-rate basis, which accountsfor sales prior to foreign-currency conversion, both overall and comparablesales were equal to last year's, Tiffany said. Total sales in the Americas slid 1% to $514 million, due toa drop in spending by both local customers and foreign tourists. Proceeds inthe Asia-Pacific region fell 3% to $226 million for the holiday period, whilerevenue in Japan rose 4% to $150 million. Although mainland China saw double-digit-percentagegrowth from local customers, there was a slowdown in spending by Chinese tourists overseas. European sales dropped 4% year on year to $132 million. By category, sales of engagement jewelry decreased 3%, whileTiffany's "designer jewelry" category dropped 8%. Sales of jewelry collectionsincreased 2% over the holiday period. Based on the holiday results, the jeweler has decreased itsfull-year forecast of sales growth for fiscal year 2018, which ends January 31. It now expects worldwidenet sales for the year to increase by 6% to 7% compared with the high-single-digitpercentage it had previously reported. The company will report full results forthe year in March. The current "external pressures" are expected to have somenegative effect on fiscal 2019 results, Bogliolo noted, primarily in the firsthalf of the year. However, the company is on a "solid path for improved sales,"he added. Tiffany will launch new products, revamp its marketing,expand stores, and enhance its website offerings during the year, the CEO pledged. Global net sales for the fiscal year that begins February 1 are expected to increase by alow-single-digit percentage versus 2018, with comparable sales rising by amid-single-digit percentage, the company said. The results follow disappointing holiday figures from Signet Jewelers, with the retailer's total sales falling 2.5% to $1.84 billionduring the period. Image: A Tiffany store in Shenzhen, China. (Coreamyilsa Lim)