Tiffany Shares Crashed On Wednesday, Here’s Why


Tiffany & Co (NYSE:TIF)

Shares of Tiffany had a rough trading session on Tuesday, shedding $12.75, or 12.15% to change hands at $92.20 at 3:45 p.m. in New York.

The selloff was triggered by disappointing fiscal third-quarter results that the company reported before the opening bell with top line missing expectations.

According to the luxury jewelry retailer, lower Japanese demand and reduced spending by Chinese tourists in Hong Kong and the U.S. was largely to blame for the weak results and downbeat full-year forecast.

During the 13-week period that came to a close on October 31, the company earned $94.9 million, or $0.77 per share, down from $100.2 million, or $0.80 per share, in the year-ago quarter. Net sales were $1.01 billion, compared with $976.2 billion in the same three months last year. Analysts polled by Refinitiv had called for adjusted earnings of $0.77 per share on revenue of $1.05 billion.

Global comparable sales increased 2.0% but missed analyst expectations for a growth of 5.4%, with every region falling short of estimates. The company did not make any changes to its earnings and sales growth guidance for the full year. However, it slashed its sales growth outlook at stores opened for at least 12 months from the mid-to-high-single-digits to the mid-single digits.

Tiffany chief executive Alessandro Bogliolo had this to say on the performance, “It is worth noting that in the third quarter our sales attributed to local customers continued to grow at a strong rate worldwide and were positive in every region, with particularly strong growth in mainland China. Jewelry volumes also increased in the quarter and year to date. This resulted in mid-single-digit net sales growth in the quarter and even higher growth year-to-date, despite lower-than-expected spending in the third quarter attributed to Chinese tourists in the U.S. and Hong Kong and lower wholesale travel-retail sales in Korea.”

Tiffany & Co. Profile

Tiffany & Co. is a holding company, which through its subsidiaries, engages in manufacture and sale of jewelry merchandise. The firm also sells timepieces, leather goods, sterling silver goods, china, crystal, stationery, fragrances, and accessories. It operates through the following geographical segments: Americas, Asia-Pacific, Japan, Europe, and Other.

The Americas segment operates in U.S., Canada, Mexico, Brazil, and Chile. The Asia-Pacific segment consists of China, Korea, Australia, Hong Kong, Taiwan, Singapore, Macau, Malaysia, New Zealand, and Thailand. The Japan segment comprises of 50 stores located within department stores.

The Europe segment includes the United Kingdom, Italy, Germany, France, Spain, Switzerland, the Netherlands, Austria, Belgium, the Czech Republic, Ireland, and Russia. The Other segment covers retail sales and wholesale distribution in the emerging markets region, wholesale of diamonds, and licensing agreements. The company was founded in 1837 and is headquartered in New York, NY. – CNN Money