Tiffany’s total net sales in the second quarter to July 31st fell 5.9 percent to $931.6 million, while analysts were expecting $934.74 million. Sales at its stores open for more than a year dropped 8 percent, steeper than the 6.90 percent decline analysts were expecting, according to research firm Consensus Metrix.
Tiffany’s net income inched up to $105.7 million, or 84 cents per share, in the quarter ended July 31 from $104.9 million, or 81 cents per share, a year earlier. Analysts on average were expecting profit to drop to $89.8 million, or 72 cents per share, according to Thomson Reuters I/B/E/S.
The unexpected rise in second-quarter profit was driven by lower raw material costs, price hikes and the sale of more high-margin jewelry.
The company’s selling, general and administrative costs fell 4.3 percent to $402.2 million, helped by lower marketing costs. Its gross margin increased to 61.9 percent from 59.9 percent.
The company said sales were lower in continental Europe due to weak demand from both tourists and local customers, but sales in United Kingdom fared better.
“The global environment continues to reflect well known challenges that we believe have had broad effects on spending by local customers, as well as foreign tourists, especially from China,” Chief Executive Frederic Cumenal said in a statement.
Tiffany maintained its full-year profit forecast of a net sales falling in the low single-digits in percentage terms, and earnings per share declining in the mid-single-digit percentage range.
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