Tiffany & Co. on Thursday reported that second quarter net sales fell 29% to $747 million as comparable sales declined 24%. E-commerce grew 123%, and for the first half of the year was about 15% of total global net sales, versus 6% in each of the last three fiscal years.
Net earnings fell 77% to $31.9 million, as gross profit reached $461.6 million or 61.8% of sales, according to a company press release.
Regarding its merger agreement with Parisian luxury conglomerate LVMH, Tiffany also said it recently extended the outside date either could walk away from the deal without penalty to Nov. 24. LVMH in turn has notified the jeweler that "it reserves the right to challenge the validity of the extension," per the release.
Tiffany appears to be regaining its strength after the COVID-19 pandemic interrupted its turnaround and endangered its merger agreement with LVMH. Its 29% sales tumble in the quarter was better than the 45% plunge of the first quarter.
Even more encouraging is strength seen in the current quarter: Preliminary month-to-date sales through Aug. 25th are slightly above the same period last year, the company said.
The fate of its deal with the French luxury house is murkier than when it was first announced, and hailed by analysts as a boon for both sides. The deal had been expected to close by now, but LVMH's board met in June to gauge the pandemic's effect on the deal, widely seen as an effort to cut its price.
But the iconic American jeweler has its eye on the future. Earlier this week the retailer unveiled renderings of an upper addition to its Manhattan flagship begun last year and expected to be complete in 2022 (a year when tourists may return to New York City). The "undulating glass" structure will be an exhibition, event and clienteling space. Tiffany describes its emerging glass topper as a "holistic transformation" of a magnitude previously not seen in the flagship building’s 80-year history.
The company also made progress in its effort around transparency in diamond sourcing, a key differentiation of its merchandise first announced last year. This October the jeweler will enable diamond traceability by "sharing the full craftsmanship journey of its newly sourced, individually registered diamonds (0.18 carats or larger)," according to a company press release.
For newly sourced, individually registered diamonds, Tiffany will reveal their region or countries of origin, plus where they are cut and polished, graded and quality assured, and set in jewelry. This information will be available from any sales professional and printed on the Tiffany Diamond Certificate, the company said.