Tiffany & Co. reported below-expectations results for its first quarter of 2019 (ended April 30), as comps, sales, and earnings all declined. Worldwide net sales declined 3% in the quarter to $1 billion, while comps declined 5%.
On a constant-exchange-rate basis, net sales equaled the prior year’s but comps fell 2%. Net earnings came in at $125 million, 12% lower than the prior year’s $142 million.
On a conference call following the release of its financial results, chief executive officer Alessandro Bogliolo said the company’s results were hurt by the sharp decline of Chinese tourists into the United States. He said that the company was encouraged by strong local sales, particularly in mainland China.
Its U.S. performance was “positive, but we have seen some degree of caution in the U.S. customer,” he said. “This caution is linked to several factors. First of all, we have seen that consumer confidence [numbers] in the first quarter of the year are pretty low, compared to one year ago, when [confidence] was extremely high. We have also seen big brands in the cosmetic industry and the fashion industry [and U.S.] department stores reporting soft sales in the first quarter…. [The mood] is positive but very cautious.”
Bogliolo seemed more comfortable talking about the company’s suite of initiatives to revamp the brand. He noted that the company had more new products to announce by the end of the year, though for this year it will focus on established lines like Tiffany T. It is also getting ready to revamp its New York City flagship and hopes to have its temporary home ready by the end of the year.