Tiffany & Co. reported an increase in sales in the fourth quarter as gold and diamond jewelry boosted its balance sheet, but the coronavirus outbreak looms large as many of the retailer’s stores remain closed.
Worldwide net sales in the fourth quarter rose 3 percent to $1.36 billion, compared with $1.32 billion a year ago. Same-store sales were also up 3 percent. Net sales for the full year clocked in at $4.44 billion, a slight increase compared with $4.42 billion a year ago, while same-store sales were unchanged.
“Our primary focus now is on preparing our company, business and communities for the COVID-19 pandemic and the return to normal operations,” CEO Alessandro Bogliolo said in a press release.
Tiffany’s stores in the United States and Canada have been closed temporarily as the countries grapple with the coronavirus outbreak. In mainland China, the jeweler has lost half of its normal selling days since Jan. 24.
Looking at the jeweler’s fourth-quarter performance region by region, in the Americas, where the most Tiffany stores are located, net sales in the fourth quarter were up 4 percent to $640 million with same-store sales up 3 percent as local customers increased spending.
Full-year sales slipped 2 percent to $1.9 billion with same-store sales also down 2 percent. The dip in sales was attributed to lower spending by foreign tourists.
In the Asia-Pacific region, fourth-quarter net sales were up 8 percent to $342 million with same-store sales climbing 7 percent. For the full year, net sales were up 2 percent to $1.3 billion with same-store sales down 1 percent.
The company experienced “significant disruptions” in the Hong Kong market due to political unrest but double-digit growth in mainland China in the fourth quarter and the full year offset that.
European sales rose 4 percent to $168 million in the fourth quarter with same-store sales up 5 percent. For the full year, sales dipped 1 percent to $498 million with same-store sales down 1 percent.
In Japan, sales dipped 8 percent in the quarter to $180 million, which Tiffany said reflected a change in Japan’s consumption tax, with same-store sales also down 8 percent. Full-year sales in Japan were up 1 percent to $650 million with same-store sales unchanged.
Sales from the “other” segment, which includes five Tiffany stores in the United Arab Emirates, fell 9 percent to $26 million in the quarter while same-store sales were up 11 percent. Full-year sales were down 2 percent to $94 million with same-store sales down 9 percent, with the dip attributed to a decrease in wholesale sales of diamonds.
By category, sales from Tiffany’s jewelry collections, which includes lines like “Paper Flowers,” were up 2 percent while engagement jewelry sales dipped 2 percent.
The “Tiffany T” collection as well as its high jewelry were the sales drivers, the jeweler said, while sales of jewelry from designers Elsa Peretti, Paloma Picasso and Tiffany & Co. Schlumberger fell 6 percent
Bogliolo attributed growth in the fourth quarter to the company’s focus on “elevating our sales mix toward higher-value items within each jewelry product category, with the largest growth being in our gold and gold and diamond offerings.” The higher price points of the gold and diamond offerings contributed to a 10 percent year-over-year increase in overall average unit retail price.
Highlights of Tiffany’s year include the addition of colorful pieces to its “Tiffany T” collection, a new men’s collection, the launch of his and hers Tiffany & Love fragrances, and the “Very, Very Tiffany” holiday campaign and catalog featuring luxe, high-ticket gift items.
As of Jan. 31, there were 326 Tiffany stores in operation worldwide, including 124 in the Americas. Nine stores opened and four closed this fiscal year.
Tiffany did not provide guidance for the year ahead as its acquisition by luxury titan LVMH is still pending.
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