European sales down 1% against tough year-on-year comparisons.
Tiffany & Co’s European sales dipped 1% in the second quarter to July 31 with group reporting that sales were particularly soft in the UK.
European Q2 sales fell to US$100 million, a result that led to an overall 1% rise for the financial year to date.
Like-for-like sales in Europe were up 2% in the period and a statement from the jewellery brand said that “sales growth in overall continental Europe was mostly offset by relative softness in the UK”.
Worldwide sales at the group were up 2% to US$887 million in Q2 while same store sales fell 1%. The strongest region for the group was Japan where sales rose 11%. During the period the company added nine stores with openings in Mexico City, Shanghai, Nanjing, China, France and the UAE.
Tiffany & Co chairman and chief executive Michael J. Kowalski said: "Not surprisingly, sales growth has been affected by economic weakness in a number of markets and by a very challenging prior-year comparison to a 30% increase in worldwide net sales.
“We also anticipated the reduced operating margin in the quarter, adjusted for nonrecurring items, due to continued, but moderating, high product input costs and a lack of sales leverage on fixed costs. The resulting decline in net earnings, when compared with last year’s earnings excluding nonrecurring costs, was in line with our expectations and was on top of a 58% increase in last year’s second quarter."
Looking ahead, Kowalski said that Tiffany & Co is planning to continue its expansion drive with 28 company-owned stores expected to be added to its portfolio in this financial year with a heavy focus on the Americas.
Tiffany & Co said that it expects worldwide net sales to increase by 6% to 7%, down from its previous forecast of between 7% and 8% growth due to a moderation in assumed fourth quarter sales growth.