Fiscal Q2 sales exceed expectation
Tiffany (TIF) has impressed with its sales performance so far this year. During the fiscal second quarter, it reported net sales of $1.1 billion, which was more than analysts’ expectation, and marked a 12.1% growth YoY (year-over-year). Higher unit volumes led by increased spending by local customers drove its top line. Its omnichannel offerings, new products, in-store initiatives, and effective marketing bode well for future growth.
The company’s management remained upbeat and expects fiscal 2018 net sales to mark high-single-digit growth despite the headwinds from adverse currency rates, which are likely to hurt tourist spending.
During the fiscal second quarter, Tiffany’s comps improved 8%, reflecting healthy sales growth across all business segments. In comparison, analysts expect Signet Jewelers’ (SIG) top line to remain weak and mark a YoY decline in the fiscal second quarter since the company’s credit portfolio outsourcing is likely to hurt its comps.
Sales by regions
Tiffany’s top line in the Americas rose 8% to $475, driven by higher spending by local customers. Sales increased across most of its regions. Sales continued to grow at a brisk pace in the Asia-Pacific region, led by strength in Greater China. Net sales in that region increased 28% to $301 million. An expanded stores base in China is likely to further support the top-line growth in the region in the coming quarters.
In Japan, net sales grew 11% to $155 million. Management stated that increased spending by local customers drove second-quarter sales. Europe showed signs of improvement with growth in the United Kingdom. Net sales increased 5%, driven by favorable currency translation rates and new store openings.