Holiday sales at Tiffany fell because Chinese tourists spent less



Tiffany moderated her annual earnings forecast on Friday after luxury jewel holiday sales fell unexpectedly, as Chinese tourists spent less worldwide due to a stronger dollar and demand softened in Europe and at home. .

Like other luxury goods firms, Tiffany is based on the spending of China's growing middle clbad, as consumer demand remains moderate in the United States and Europe, overwhelmed at the time by uncertainties such as the closure part of the government of the United States and the British plan to leave the European Union.

During the crucial period from November to December, Tiffany's worldwide sales in the same stores fell 2 percent, while net sales fell 1 percent, against their expectations of modest increases.

Tiffany's chief executive, Alessandro Bogliolo, accused foreign tourists, mainly Chinese, to the greatest amount of expenses worldwide, and to the large amount of uncertainties and volatility that may have affected the demand of customers in Europe and America.

"We see that Chinese tourists who spend abroad go down sharply, minus 20-25, 30-35 percent, and this happens in many, many countries … in the US, but it's also Hong Kong and now it is spreading to Southeast Asia. " Bogliolo told Reuters. "Surely it's due to the exchange rate."

Shares of Tiffany, which fell 22 percent in the last 12 months, rose 3 percent in morning trading.

"Tourism is to blame for TIF's disappointing holiday numbers, but this does not surprise us given the stronger dollar," said Jefferies badyst Randal Konik.

Bogliolo also said that issues such as Brexit, the protests in France and the closure of the United States, now on its 28th day, "make me more cautious" about sales and earnings forecasts, but expect a couple of "very difficult" quarters. "

A slowdown in Chinese tourists' spending caused Tiffany to avoid increasing its annual profit targets in November. On Friday, he said he expects earnings for the entire 2018 fiscal year around the lower limit of his estimated range of $ 4.65 to $ 4.80 per share.

However, customer demand at Tiffany stores in mainland China remained strong during the holiday season, the company said.

David Schick, of Consumer Edge Research, said the strength "supports the vision of the brand's continued relevance, which is important for long-term history."

The results of the New York-based jewelry holiday period reflect similar reports from other US retailers. UU Macy's, Kohls and others reported disappointing results, even when overall purchases during the 2018 vacations in the United States reached a maximum of six years.

On Thursday, the small US-based jeweler, Signet, reported lower sales during the holiday period and cut its profit forecast for the entire year, which led to its shares falling 20 percent.

Tiffany, known for her engagement rings and her blue egg boxes from Robin, said that Christmas sales of design and engagement jewelry fell by 3 percent and 8 percent, respectively.

Annual sales should increase between 6 and 7 percent, the company said. He had had an earlier estimated growth in the digits of a single high percentage.

For the year ending in January 2020, Tiffany expects earnings per share to increase in the middle and individual digits and for net sales to increase in the low single digits.


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