- Tiffany and Co. shares sank Tuesday after the company beat on earnings but missed on revenue.
- The company attributed slowing sales to lower spending by foreign tourists.
- The company expects tariffs on jewelry exported from the US to China to rise to 25%.
- Watch Tiffany and Co. trade live.
Foreign tourists still aren’t lining up to buy Tiffany’s abroad, but some are shopping at home.
Tiffany & Co. shares sank more than 3% in pre-market trading Tuesday after the company posted first-quarter results that beat on earnings but missed on sales.
Tiffany is also counting on tariffs on jewelry exported from the US to China to increase from current levels to 25% on average. This could weaken sales in China, a big driving region for the company.
Here’s how the company fared compared to what analysts surveyed by Bloomberg were expecting:
- Adjusted earnings per share: $1.03 ($1.01 expected)
- Revenue: $1 billion ($1.02 billion expected)
The company said global sales were down due to lower spending by foreign tourists, a trend that has persisted from the second half of 2018.
"Our first quarter results reflect significant foreign exchange headwinds and dramatically lower worldwide spending attributed to foreign tourists," said Alessandro Bogliolo, CEO of Tiffany & Co, in a company statement. "That said, we were pleased that, at the core of our business, global sales attributed to local customers, led by sales in China, grew over last year’s very strong sales results."
Mainland China presented a bright spot for the company once again. The company said strong growth there made up for some of the mixed results in other Asia-Pacific markets where sales declined 1%. Sales in the Americas, Japan and Europe each declined 4%.
During the quarter, Tiffany opened two new stores, closed two stores and relocated two others. From a year ago, the company has boosted its number of stores in Asia-Pacific and Japan, while shrinking its footprint in Europe and the United Arab Emirates.
The company now expects low-single-digit increases in sales for the rest of 2019. In the second quarter, it sees net earnings per diluted share declining due to "continuing sales pressures from the effect of lower foreign tourist spending."
Sales could also reflect shifting consumer sentiment: in the second quarter jewelry collections rose 1%, engagement jewelry declined 6% and designer jewelry declined 14%.
Shares of Tiffany are up 10% this year.
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