Global Consumption Of Chinese Tourists Is Significantly Reduced, Tiffany Holiday Sales Decline

Despite strong sales growth in mainland China, sales of holiday brands in the US jewellery Tiffany &Co. (Tiffany) declined due to weaker US dollar, weaker domestic demand in Europe and the United States, and reduced consumption of Chinese tourists worldwide.

In the two months as of December 31, 2018, the sales of the Tiffany holiday season are as follows:

Global net sales fell 1% to $1 billion 40 million compared with the same period last year.

Comparable sales fell 2% year-on-year, at fixed exchange rates, unchanged from last year.

By Region:

In the Americas, net sales fell 1% to $514 million year-on-year, with local customers and foreign tourists spending slightly lower than comparable sales last year.

According to the fixed exchange rate, the two data were all unchanged from the previous year.

In the Asia Pacific region, net sales fell 3% to 226 million US dollars over the same period last year. In addition to strong sales growth in mainland China, some other markets which were more dependent on foreign tourism consumption were weak. Comparable sales fell by 4% over the same period last year.

At fixed exchange rates, net sales were flat compared with last year, a year-on-year decrease of 2% compared with the same period last year.

In Japan, net sales increased 4% to $150 million compared to the same period last year, representing an increase of 4% over the same period last year.

Management attributes growth to higher spending by local customers.

At fixed exchange rates, total sales and comparable sales increased by 4% over the same period last year.

In Europe, net sales fell 4% to 132 million US dollars compared with the same period last year, compared with 5% year-on-year sales. The performance of various countries was different, and the expenditure of local customers and foreign tourists declined slightly.

At fixed exchange rates, net sales increased by 1% over the same period last year, down 1% from the same period last year.

In other regions, net sales fell 11% to 14 million U.S. dollars over the same period, due to a decline in comparable sales of five stores in the UAE.

By category:

Sales of main jewelry series increased by 2% over the same period last year.

The sales of engagement series and Designer Series decreased by 3% and 8% respectively over the same period last year.

Alessandro Bogliolo, chief executive of Tiffany, said: "although sales in mainland China continued to grow strongly, Japan's performance was robust and global electricity sales growth was strong, but overall holiday sales were below our expectations.

We attribute this result partly to declining sales of tourists from all over the world (mainly China) and weak demand from local customers in the Americas and Europe.

We believe that this may be influenced by external events, uncertainties and market fluctuations.

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Alessandro Bogliolo added: "we see that the consumption of Chinese tourists abroad has dropped significantly, and in many countries such as the United States, 20%-35% has been reduced.

And this trend is spreading to Southeast Asia. "

Tiffany 2018 fiscal year Outlook:

Annual net sales increased by 6%-7%

Comparable sales year-on-year median growth

Diluted earnings per share ranged from $4.65 to $4.80.

The total retail area increased by 2% year-on-year, opening 10 stores, closing 4, and moving at least 15.

Tiffany has opened 10 direct stores and closed 4 stores since last year.

As of December 31, 2018, there were 321 Direct stores (124 in the Americas, 90 in the Asia Pacific region, 55 in Japan, 47 in Europe, 5 in the United Arab Emirates), and there were 316 stores a year ago (125 in the Americas, 87 in the Asia Pacific region, 54 in Japan, 46 in Europe, and two in the United Arab Emirates).

"We expect net sales and net revenues to reach record levels in fiscal year 2018," Alessandro Bogliolo said.

We will continue to pursue the six major strategic priorities we released in the early 2018: expanding brand influence; updating products and strengthening store display; establishing a full channel sales system; further consolidating the leading position of brands in key markets; building a more efficient business model; and strengthening team solidarity and flexibility.

This requires us to make continuous efforts in the next few years. "

Tiffany also released a preliminary outlook for the 2019 fiscal year:

Net sales year-on-year low single digit growth

Diluted earnings per share year-on-year median growth

Net profit is expected to decline in the first half

Alessandro Bogliolo said: "we hope to make further meaningful progress in the middle of 2019.

We plan to launch new products, enrich marketing content, expand stores and enhance websites.

We recognize that external pressure, sales difficulties year after year and annual internal expenditure are expected to have some negative effects on the performance of fiscal year 2019, mainly in the first half of the year.

But we think that Tiffany is on a solid road and will continue to improve sales, profits, earnings and cash flows.