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- Shares of Tiffany & Co. rose as much as 5% on Wednesday as the company’s second-quarter earnings beat offset declining revenue due to a slowdown in tourist sales.
- The luxury jeweler saw its global sales fall by 3% in the second quarter as international tourists decreased spending in the US amid a strong dollar.
- International shoppers are an important stream of revenue for Tiffany, particularly in the retailer’s New York store.
- The company also said ongoing protests in Hong Kong hurt sales in the city.
- Watch Tiffany trade live.
Shares of Tiffany & Co. climbed as much as 5% on Wednesday as the retailer’s better-than-expected earnings outweighed a declined in sales. Revenue fell due to a drop-off in demand for luxury jewelry among international tourists.
Here are the key numbers from Tiffany’s second-quarter earnings report:
- Revenue: $1.04 billion, compared to $1.06 billion expected by analysts
- Earnings per share: $1.22, versus $1.04 predicted by analysts
- Profit: $136 million, compared to $128 million estimated by analysts
"Second quarter sales results were also impacted by a continued sharp decline in sales to both Chinese and all other tourists, which we believe lowers our reported sales by a couple of percentage points," Chief Executive Officer Alessandro Bogliolo said during the company’s earnings call.
International tourists typically decrease spending when the dollar strengthens because their currency won’t go as far in the US. The US dollar rose to its highest level of 2019 last week amid continued criticism from President Trump that America’s currency is too strong.
Sales in the Americas fell 4% to $455 million, while Asia-Pacific revenue dropped 1% to $298 million. The company said "meaningful disruption" in Hong Kong had a negative impact on sales in the region. The city has been in upheaval in recent weeks amid ongoing pro-democracy protests that shutdown the city’s airport earlier this month.
Tiffany expects worldwide net sales to climb by a low-single digit percentage this year, with earnings per share rising by a low-to-mid-single digit percentage from last year.
Shares of Tiffany are up roughly 5% year-to-date.
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Source: Business Insider – feedback@businessinsider.com (Daniel Strauss)