Tiffany sees sales improvement in Q2, gains profit

For the second quarter, Tiffany & Co. returned to profitability and saw sequential improvements in monthly worldwide net sales from May to July. Worldwide net sales declined 29 percent from the prior year to 747 million dollars and comparable sales declined 24 percent from the prior year; on a constant-exchange-rate basis, worldwide net sales declined 28 percent from the prior year and comparable sales declined 23 percent from the prior year. Worldwide net sales in the first half were 37 percent below the first half of the prior year to 1.3 billion dollars. These declines, Tiffany said in a statement, a result of the continuing negative global impact of Covid-19 into the second quarter of 2020, resulted in a net loss for the first half.

Commenting on the trading performance, Alessandro Bogliolo, the company’s Chief Executive Officer, said: “We were excited to see that the encouraging trends we cited for the first quarter, namely, increased sales in Mainland China and global e-commerce, accelerated during the second quarter and propelled our return to quarterly profitability. Importantly, our global sales trends have strengthened in August, with preliminary month-to-date worldwide sales through August 25th being slightly positive as compared to the same month-to-date period in the prior year.”

Tiffany returns to profitability in Q2

Second quarter net earnings of 32 million dollars were 77 percent lower than the prior year’s 136 million dollars, while net earnings per diluted share were 26 cents versus 1.12 dollars in the prior year. Excluding certain costs recorded in the period related to the pending acquisition of the company by LVMH, second quarter net earnings were 39 million dollars or 32 cents per diluted share.

For the first half, net loss was 33 million dollars compared to net earnings of 262 million dollars in the prior year, and net loss per share was 27 cents versus net earnings per diluted share of 2.15 dollars in the prior year. Excluding costs recorded in the period related to the merger and other items, first half net loss was 25 million dollars or 21 cents per share.

Covid-19 related store closures results in sales drop across markets

In the Americas, the company’s total net sales decreased 46 percent in the second quarter and 45 percent in the first half, to 247 million dollars and 472 million dollars, respectively; while comparable sales decreased 44 percent in both the second quarter and first half. On a constant-exchange-rate basis, total sales declined 45percent in both the second quarter and first half, while comparable sales decreased 44 percent in both periods.

In Asia-Pacific, total net sales were flat in the second quarter and decreased 24 percent in the first half, to 299 million dollars and 473 million dollars, respectively, which included a comparable sales increase of 17 percent in the second quarter and a decrease of 16 percent in the first half. In the second quarter, total sales results reflected strong retail sales growth in Mainland China and Korea, largely offset by softness across other markets and a decline in wholesale travel retail sales. On a constant-exchange-rate basis, total sales increased 2 percent in the second quarter and decreased 22 percent in the first half, while comparable sales increased 19 percent and decreased 13 percent, respectively, in those periods. In Japan, total net sales decreased 28 percent in the second quarter and 34 percent in the first half to 111 million dollars and 197 million dollars, respectively; while comparable sales decreased 27 percent and 34 percent, respectively. On a constant-exchange-rate basis, total sales decreased 29 percent in the second quarter and 35 percent in the first half, while comparable sales decreased 28 percent and 35 percent, respectively, in those periods.

In Europe, total net sales declined 28 percent in the second quarter and 34 percent in the first half to 84 million dollars and 145 million dollars respectively, and comparable sales declined 27 percent and 34 percent, respectively. On a constant-exchange-rate basis, total sales decreased 27 percent in the second quarter and 32 percent in the first half; comparable sales declined 26 percent and 33 percent, respectively, in those periods.

Other net sales declined 73 percent in the second quarter and 68 percent in the first half to 7 million dollars and 16 million dollars, respectively in those periods. The decrease in the both periods was due to decreases in sales within the Emerging Markets region and in wholesale sales of diamonds.

Tiffany opened one company-operated store and closed five others in the first half and at July 31, 2020, operated 322 stores including 123 in the Americas, 88 in Asia-Pacific, 59 in Japan, 47 in Europe, and five in the UAE.

Picture:Facebook/Tiffany & Co.

 

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