Same-store Tiffany sales plunged 13 per cent in the six months in Asia-Pacific – excluding Japan where they rose 10 per cent, but fell on a constant currency basis.
Sales growth in China and Korea was offset by a continuation of significant declines in Hong Kong and more moderate declines in most other markets, the company reported.
Same-store North America sales declined nine per cent in the six months, largely due to declining spending by Chinese tourists in the US.
“The global environment continues to reflect well known challenges that we believe have had broad effects on spending by local customers, as well as foreign tourists, especially from China,” said CEO Frederic Cumenal.
“We are managing expenses efficiently, but also maintaining our marketing spending as a percentage of sales and continuing to invest in key strategic initiatives and opportunities to further strengthen Tiffany’s competitive position among global luxury brands.”
In the Asia-Pacific region, total sales of US$230 million in the second quarter and US$469 million in the first half were down six per cent and seven per cent, respectively, and comparable store sales declined 12 per cent and 13 per cent. On a constant-exchange-rate basis, total sales and comparable store sales declined three per cent and nine per cent in the second quarter and four per cent and 11 per cent in the first half.
During the second quarter, worldwide net sales declined 6 per cent to $932 million and comparable store sales declined 8 per cent. Net earnings rose one per cent to $106 million, in the prior year. Net earnings declined five per cent from the prior-year period’s $111 million, which excludes a specific charge in that period.
In the first half, worldwide net sales of $1.8 billion were down seven per cent and comparable store sales declined nine per cent. On a constant-exchange-rate basis, worldwide net sales and comparable store sales declined 6 per cent and 9 per cent, respectively.
Net earnings for the half year were $193 million.
Gross margin increased to 61.9 per cent in the second quarter and 61.6 per cent in the first half, due to lower product input costs, changes in product sales mix and price increases taken in the past year.
This story first appeared on our sister site, Inside Retail Asia.