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Tiffany, whose traditional engagement and solitaire jewelry was
popular among baby boomers, has been offering lower priced
fashion jewelry in the past year after several quarters of
declining sales in the category.
Price-conscious millennial shoppers drifting to stores and
websites of newer players such as Denmark's Pandora A/S <PNDORA.CO>
and online jeweler Blue Nile, which sell sterling silver jewelry
starting from $35, have put more competitive pressure on
Tiffany.
In response, the New York-based upscale jeweler refreshed its
line of fashion jewelry to include cheaper-priced items, hired
Tapestry's former creative chief Reed Krakoff to become part of
the executive team and launched new high-end designs like the
Tiffany T and the Tiffany HardWare collection, featuring pieces
like a $12,000 link bracelet in 18k rose gold.
"New CEO Alessandro Bogliolo indicated there is potential in the
medium to long-term for 'meaningful' comp store growth
...(potentially suggesting no need to reset earnings
expectations at this time) and we tend to agree," ConsumerEdge
Research analyst David Schick wrote in a note.
Tiffany said sales in the Americas, its biggest market, rose 1
percent in the third quarter, while sales from Asia-Pacific
jumped 15 percent on strong demand in mainland China.
Total revenue rose 3 percent to $976.2 million.
However, the company reported an unexpected drop in overall
comparable store sales.
Tiffany's comparable store sales declined 1 percent due to lower
spending by foreign tourists in the Americas, while analysts on
average were expecting an increase of 0.02 percent, according to
Thomson Reuters I/B/E/S.
New York-based Tiffany's net income rose 5.4 percent to $100.2
million, or 80 cents per share, in the quarter ended Oct. 31.
Analysts on average had expected a profit of 76 cents per share
and revenue of $957 million.
The company's shares were marginally down at $93.73 before the
bell on Wednesday.
(Reporting by Gayathree Ganesan in Bengaluru; Editing by Savio
D'Souza, Bernard Orr)
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