Tiffany & Co Sales Down 1% Due to Poor U.S. Sales
November 26, 08
Tiffany & Co. reported a one percent decline in worldwide sales in the third quarter ended October 31. The decline reflected weakness in the U.S. offset by increased sales outside the U.S. the company said Wednesday.
Net sales declined to $618.2 million. On a constant exchange rate basis, worldwide net sales declined 2 percent and comparable store sales declined 7 percent.
Net earnings from continuing operations in the third quarter were $43.8 million compared to $103.1 million the year before. The earnings in 2007 resulted from the company's sale-leaseback of the building housing its Tokyo flagship store and a $10 million contribution to The Tiffany & Co. Foundation. Excluding these items, net earnings per share increased 13 percent.
Sales in the Americas declined 7% to $331.8 million. Comparable U.S. store sales declined 14%, while the New York flagship store declined 5%.
Sales in Asia-Pacific increased 3% to $206.0 million, enjoying comparable store sales growth in most countries, except Japan.
Sales in Europe rose 16% to $58.2 million in the third quarter.
In the outlook for the coming year, Chairman and CEO Michael J. Kowalski said it is impossible to know when consumer confidence will be restored. “In November-to-date, U.S. sales have softened from levels at the end of the third quarter and the Company is forecasting a continuation of those weak trends through the fourth quarter, as well as challenging conditions, to a lesser extent, in Asia-Pacific and Europe.”
Tiffany expects full year 2008 net earnings in a range of $2.30 - $2.50 per diluted share based on worldwide net sales ranging from a 2% decline to unchanged from 2007.
As a result, staff reductions are planned.
“We are still in the early stages of formulating our financial plans for 2009 but I can say that we will look for opportunities to increase market share, while simultaneously pursuing various cost reduction avenues appropriate for this environment, including a moderation in the rate of new store openings in 2009,” Kowalski added.