Tif­fany sales to Chi­nese tourists dis­ap­point, shares fall sharply

Global Times US Edition - - BUSINESS -

Tif­fany & Co on Wed­nes­day re­ported quar­terly sales that missed es­ti­mates as tourists from the Chi­nese main­land spent less than ex­pected at the jew­eler’s stores in the US and Hong Kong, a short­fall that sent the com­pany’s shares down as much as 13 per­cent.

In­vestors were also dis­ap­pointed by the com­pany’s fail­ure to raise its ful­lyear profit out­look ahead of the hol­i­day sea­son and by the slower than ex­pected growth of same-store sales.

Tif­fany shares fell 11.81 per­cent to $92.54 at close of trad­ing on Wed­nes­day.

Chief Ex­ec­u­tive Alessan­dro Bogli­olo tried to re­as­sure in­vestors by point­ing out that while spend­ing out­side the main­land was down, sales in the main­land were ro­bust.

“We can spec­u­late on the rea­sons for the drop in tourist spend­ing out­side the main­land but the re­al­ity is that the Tif­fany brand is ap­peal­ing to Chi­nese cus­tomers as ev­i­denced by the con­tin­ued strong sales growth in the Chi­nese main­land in the quar­ter,” he said.

Some of the in­crease in de­mand in the main­land could be at­trib­uted to Tif­fany low­er­ing prices in the coun­try af­ter the Chi­nese gov­ern­ment cut tar­iffs on lux­ury goods, he said.

Bogli­olo said Tif­fany was shift­ing more in­ven­tory to the main­land, where cus­tomers are spend­ing more than they are over­seas.

“When it comes to tourism, what we do is try to fol­low the cus­tomers while they spend... We are in­creas­ing our in­ven­tory in the main­land be­cause de­mand there has grown,” Bogli­olo said.

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