News Bureau

Tiffany global sales tumbled by 6 percent!

Tiffany & Co reported its financial results for the three months and six months ended July 31, 2016. Worldwide net sales were below the prior year in both periods, which management attributed to declines in sales to both local customers and foreign tourists in most regions.

Net earnings as reported in the second quarter were above the prior year and declined in the first half. In both periods, earnings benefited from higher gross margins, but there was a lack of sales leverage on operating expenses.

In the Q2, worldwide net sales declined 6% to $932 million and comparable store sales declined 8%. On a constant-exchange-rate basis that excludes the effect of translating foreign-currency-denominated sales into U.S. dollars, worldwide net sales and comparable store sales declined 6% and 9%, respectively.

Net earnings rose 1% to $106 million, or $0.84 per diluted share, from $105 million, or $0.81, in the prior year. Net earnings declined 5% from the prior-year period's $111 million, or $0.86 per diluted share, which excludes a specific charge in that period. 

In the context of H1, Worldwide net sales of $1.8 billion were 7% below the prior year and comparable store sales declined 9%. On a constant-exchange-rate basis, worldwide net sales and comparable store sales declined 6% and 9%, respectively.

Net earnings of $193 million, or $1.53 per diluted share, included a tax benefit of $0.05 per diluted share in the first quarter related to the settlement of a tax examination. This compared with the prior year's $210 million, or $1.62 per diluted share, as reported, and $216 million, or $1.67 per diluted share, when adjusted for the charge referenced above.

Frederic Cumenal , chief executive officer, said, "The global environment continues to reflect well known challenges that we believe have had broad effects on spending by local customers, as well as foreign tourists, especially from China . We are managing expenses efficiently, but also maintaining our marketing spending as a percentage of sales and continuing to invest in key strategic initiatives and opportunities to further strengthen Tiffany's competitive position among global luxury brands. By delivering extraordinary products and experiences to our customers around the world, we remain focused on growing sales, operating margins and earnings, and creating greater value for stockholders."

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