Tiffany & Co. on Wednesday reported an 8 percent increase in net revenue during the holiday season, fueled by higher sales of fine jewelry, watches, and a new home and accessories collection.
Total same-store sales were up 5 percent during the November and December months, the company said. In the U.S. alone, same-store sales rose 6 percent.
The strongest performance for Tiffany stemmed from the Asia-Pacific region and Europe, where sales grew by a double-digit percentage. The retailer has been opening new stores overseas, and local customers are beginning to spend more there.
Building on the holiday momentum, Tiffany raised its earnings outlook for fiscal 2017. The changes don’t yet include any effects from new tax legislation.
“This recent return to growth in worldwide comparable store sales … is consistent with our commitment to generate solid and sustainable growth in sales, operating margin and earnings that is at least comparable to our industry peers over the long-term,” Chief Executive Officer Alessandro Bogliolo said in prepared remarks.
“While we are encouraged with the holiday sales results, we believe that the preceding negative comparable store sales trend can only be reversed on a sustainable basis by continuing to evolve our product offerings and customer experience and also by stepping up certain strategic spending in our business,” Bogliolo added.
Tiffany now expects net sales worldwide to increase by roughly 4 percent in fiscal 2017, and adjusted net earnings will rise by, at a minimum, a high-single-digit percentage from a year ago.
The company also on Wednesday provided a preliminary outlook for fiscal 2018 and is calling for a mid-single-digit percentage increase in total sales.
Meantime, Tiffany said it will spend more in the upcoming fiscal year on technology, marketing, and store presentations to reach growth objectives over the long term. In turn, the company is expecting earnings to be flat to slightly down from fiscal 2017’s figure.
Earnings are expected to get a boost, however, “in an amount yet to be determined, from an expected lower effective income tax rate resulting from the recent revisions to the U.S. tax code,” the company said. More details will be provided on March 16, when Tiffany is set to report fourth-quarter and full-year results.
“We remain enthusiastic given our views of the iconic nature of the brand, bridal and global business mix, luxury customer strength, and high degree of vertical integration – we believe these qualities are un-amazon-able and are a good platform for changes ahead,” Cowen & Co. analyst Oliver Chen said about Tiffany’s results.
“Changes continue to be necessary and we look forward to improved cadence of new product launches – reinvention of the store and store experience – and the tasteful blending of stores and online which should result in less friction in the buying process and also more delight,” Chen said.
Tiffany shares closed Wednesday up a little more than 1 percent, having climbed more than 30 percent from a year ago.