Tiffany & Co. (TIF, Financial) released its fourth-quarter 2019 results before the opening bell on March 20. The luxury jeweler posted earnings and revenue that surpassed expectations as sales improved in most regions. Moreover, business disturbance in Hong Kong did not offset strength in mainland China.
By the numbers
The New York-based company posted adjusted earnings of $1.80 per share, surpassing estimates of $1.77 per share. Net sales of $1.4 billion grew 3% on a year-over-year basis, surpassing the $1.36 billion in revenue analysts were expecting.
Worldwide comparable store sales grew 3%. Excluding the Hong Kong market, worldwide comps grew 5%.
Segment performance
In North America, sales inched up 4% in the fourth quarter to $640 million, while comps improved 3%. The company attributed the improvement to higher spending by local customers.
In the Asia Pacific region, sales surged 8% to $342 million. Comps soared 7% on a year-over-year basis. While the company performed well in China, growth was soft in Hong Kong due to protests regarding a new extradition law. Low foreign spending was offset by higher spending by local customers.
Total net sales in Japan declined 8% to $180 million, while comps fell at the same rate. Results were weighed down by an increase in the consumption tax imposed on Oct. 1, 2019.
Sales in Europe grew 4% on a year-over-year basis to $168 million. Comps rose 5%.
Key insights
Tiffany’s efforts to introduce new products garnered positive results and lifted the company’s fiscal 2019 performance. This has helped maintain the company’s confidence in adding products to the men’s category. Additionally, the company is augmenting its Tiffany T collection.
The company was, however, compelled to shut down stores or reduce the number of hours of operations amid the coronavirus scare. This has hampered its operations in China.
Store update
Tiffany launched nine company-operated stores during the year and shut down four locations. It currently operates a total of 326 locations.
Due to its pending merger with French luxury group LVHM Moet Hennessy (XPAR:MC, Financial), the company did not issue any guidance figures.
Disclosure:I do not hold any positions in the stocks mentioned.
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