Tiffany Sees Americas Comps Rise 1% in Q3

New York--Strong sales in the fashion jewelry and high, fine and solitaire segments helped turn around business for Tiffany & Co. in its third quarter.

Same-store sales in the Americas were up 1 percent in the period ended Oct. 31, while total sales in the region reached $421 million in the third quarter, a 1 percent increase over the prior year.

On a constant-exchange-rate basis, total sales rose 1 percent in the third quarter, with comparable store sales about flat.

The jeweler attributed the sales performance to higher spending by local customers, even as sales to foreign tourists continued to slow. Tiffany noted an increase in the number of jewelry units sold across all categories in the Americas, with the exception of engagement jewelry.

Worldwide, meanwhile, comps were down 1 percent year-over-year, while sales increased 3 percent to $976 million.

On a constant-exchange-rate basis, global sales increased 3 percent and comparable store sales were equal to the prior year.

Net earnings for the quarter increased 5 percent from $95 million in the third quarter last year to $100 million. Gross margin was nearly flat at 61 percent.

Mark Aaron, vice president of investor relations, said during the company’s earnings call Wednesday morning that it was encouraged by the growth of higher jewelry sales volume rather than ticket prices.  

He also noted they saw continued growth in fashion jewelry and resumption of growth in high, fine and solitaire jewelry, led by iconic diamond jewelry designs, especially the popular Victoria, yellow diamonds and Soleste collections.

This was offset by sales of engagement jewelry, which continued to “underperform.”

In response to the trend of consumers wanting to customize their rings, Tiffany has introduced a program in the United States and Canada that allows them to choose their own diamond cut, setting and metal.

Meanwhile, the company’s e-commerce sales grew more than overall sales during the quarter, but Aaron noted that, while it will continue to invest in online and digital marketing, Tiffany believes most customers “still are and will continue to be attracted to the in-store experience.”

Most recently, Tiffany’s Fifth Avenue flagship in New York has seen a lot of activity, including the reopening of its just-revamped fourth floor, which is home to accessories and tableware collection. It also now houses the Blue Box Café, which, Aaron said, based on long lines every day, is “fast becoming a New York tradition.”

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