Tiffany on Wednesday reported global net sales rose 8% to $1.05 billion and same-store sales rose 5% in the two months ended Dec. 31, thanks to growth across regions and product categories. On a constant-exchange-rate basis, worldwide net sales rose 6%, with same-store sales up 3%, according to a company press release.
Total sales in the Americas rose 7% to $516 million and same-store sales rose 6% (6% also in constant currency), with varying degrees of growth across most of the U.S., Canada and Latin America. In the Asia-Pacific, total sales rose 16% (13% in constant currency) to $232 million, due to a 7% (4% in constant currency) increase in same-store sales, new store openings and increase in wholesale, with retail sales growing mostly on higher spending by local customers, particularly in mainland China, Hong Kong and Korea.
Positive results in the holiday period led executives to boost the company’s net earnings guidance up a double-digital percentage to $3.55 per diluted share for the fiscal 2017 year ending Jan. 31 and for sales to rise by 4%.
It's been nearly a year since the abrupt exit of former CEO Frederic Cumenal amid slumping sales. The strong dollar impeded sales at home and abroad, its New York City flagship was obscured by its proximity to Trump Tower, and the iconic American jeweler has struggled to create designs and sales channels that appeal to millennials, without resorting to price reductions. In that time, Tiffany has made some good progress, as reflected in its holiday report.
But there's much more to be done, according to current CEO Alessandro Bogliolo, who said he's pleased with the holiday numbers. "However, while we are encouraged with the holiday sales results, we believe that the preceding negative comparable store sales trend can only be reversed on a sustainable basis by continuing to evolve our product offerings and customer experience and also by stepping up certain strategic spending in our business, all of which is reflected in our preliminary 2018 plans and earnings outlook," he said.
New designs helped the upscale retailer, Bogliolo also noted. Major fashion collections continued to perform well, but customers were equally excited about the company's fine jewelry, watches and new home and accessories collection, with some "exceptional high jewelry creations" further contributing sales. It's not clear how much of a contribution the company's lampoon-worthy "Everyday Objects" line, including a $9,000 ball of yarn, made.
High-end retail sales at the holidays surprised few this year: The high levels of consumer confidence that drove healthy sales over the red-letter sales weekend has been especially easy to find among higher-income customers, according to RSM Chief Economist Joe Brusuelas.
"My sense is that the higher-end luxury products across the spectrum from Tiffany to Sonos are poised to do quite well, because wealthy consumers are likely receiving larger year-end bonuses and benefiting from a wealth effect linked to a turbocharged equity market," he told Retail Dive in late November.
That seems poised to continue this year, with the stock market continuing to surge mightily at the moment. However, Jim Fosina, CEO of Fosina Marketing Group, told Retail Dive in an email that a significant correction could crimp everyone's style by making consumers nervous.