Tiffany Euro sales up 3% but Far East top dog

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Jeweller reduces full-year sales forecasts after tough comparisons.

Tiffany & Co’s European sales rose just 3% to US$88 million in Q1 as the brand excelled in the Far Eastern markets and it reduces its sales growth forecasts for the full year.

On a constant-exchange-rate basis, total sales rose 7% while comparable store sales were equal to the prior year – versus 15% comparable store sales growth in last year’s first quarter – with the jewellery brand claiming that there was no meaningful difference between the UK and overall continental Europe.

Europe was on a par with the US as the global markets that delivered the lowest growth for Tiffany. The brand fared better in the Asia-Pacific region where sales rose 17% to US195 million and in Japan where sales were up 15% to US$142 million.
Worldwide net sales at the group increased 8% to US$819 million and net earnings rose 1% to US$0.64 per diluted share. Like-for-like sales were up 4%.

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The jewellery company is forecasting worldwide sales growth on between 7% and 8% for the full year ending January 31, which is a lower projection than its earlier estimate of 10%.

Tiffany chairman and chief executive Michael Kowalski said: "In terms of our sales for the first quarter, regions outside the Americas performed generally as expected. However, the Americas region underperformed, continuing a soft trend that began in the last quarter of 2011 and compounded by the difficult comparison to substantial sales growth in last year’s first quarter. These sales results led to net earnings modestly trailing our expectations.

“We are updating our forecast for the full year to reflect these first quarter results and to reflect lower near-term expectations. Although we are very early into the second quarter, worldwide sales are currently increasing by a low-single-digit percentage, reflecting difficult year-over-year comparisons and decelerating rates of economic growth in many countries. In 2011, we achieved extremely strong sales growth in the second and third quarters, especially in the Americas and Asia-Pacific regions."

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