Tiffany Sees Improved Sales Trend, Strong E-Commerce

Tiffany & Co. (TIF) recently shared business updates for August and September (the two-month period). Management cited that the company’s business has been rebounding, particularly in Mainland China. Also, its e-commerce business has been exhibiting strength amid the coronavirus pandemic. In addition, Tiffany T1 line, its newest gold and gold with diamonds jewelry collection, continued to glitter during the two-month period.

Chief executive officer Alessandro Bogliolo said, "While we still expect full-year results to be substantially impacted by COVID-19, we are very pleased with the way the business has rebounded following the first quarter and continues to rebound in the third quarter, especially in Mainland China, and to recover in the United States."

This New York-based company reported impressive preliminary sales and operating earnings for the two-month period. Worldwide net sales for said period fell slightly from the year-ago period. Encouragingly, management informed that positive sales trends are being continued in October. Markedly, sales in Mainland China remained sturdy. We note that operating earnings, which is inclusive of transaction-related expenses, jumped roughly 25% year-over-year during the two-month period.

For fiscal fourth quarter, it envisions mid-single-digit percentage dip in sales, but a mid-single-digit percentage jump in operating earnings. Also, earnings per share are likely to rise from the year-ago quarter’s tally by a mid-to-high single-digit rate on a reported basis.

Few Facts to Look Upon

Tiffany, which is currently in legal fight with French luxury goods group LVMH (LVMUY), stated that sales in the United States decreased in low double-digit percentage in the two-month period, in spite of a significant fall in tourism in the United States this year. This reflects a major sequential improvement since May. Looking ahead, management remains optimistic about sales trends to improve further in the final quarter of fiscal 2020.

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