After the DG incident, the American boutique jewelry giant Tiffany had a hard time, especially the lack of "heart" to retain Chinese consumers made this luxury brand that is heavily dependent on Chinese consumers feel even more uneasy.
Tiffany's third-quarter same-store sales were less than expected due to lower-than-expected consumption of Chinese tourists in the US and Hong Kong stores. In the third quarter earnings report released by Tiffany on Wednesday, the Group's revenue for the quarter increased by 3.1% year-on-year to US$1.01 billion, compared with US$9.8 billion in the same period last year, which was less than analysts' expectations of 5.3%; net profit fell to US$9,490,000. The dollar was lower than the $102 million in the same period last year.
Although net sales for the quarter rose from $976.2 million to $1.01 billion, it was still less than the average estimate of $1.05 billion from the FactSet survey, mainly because sales in the Americas, Japan and Asia DressLily Promo Code Pacific fell short of expectations, offsetting better-than-expected European impact.
In addition, the financial report showed that global same-store sales increased by 2.0% in the quarter, which was less than the 5.4% increase in FactSet's adjusted average forecast. All regions performed worse than expected, with an unexpected decline in Europe. Tiffany also expects full-year earnings per share to be in the range of $4.65 to $4.80, which is less than analysts' estimate of $4.83.
Tiffany, with annual sales of about $4.2 billion, warned in a securities document this year: "Any slowdown in the Chinese economy could have a negative impact on store sales and profitability."
According to CNN, Chinese consumers are particularly important to Tiffany. The brand executives have said that about two-thirds of Chinese consumers will choose to spend abroad, but because of the impact of external trade friction, Chinese consumers are The desire to shop abroad is not so strong.
Neil Saunders, managing director of retail data company GlobalData Retail, said that as China's resale market is becoming less profitable, travelers may also reduce consumption of luxury goods in the United States. The Chinese government’s recent efforts to strengthen customs enforcement against “purchasing” and those that bring expensive goods into China have also “cooled down” overseas consumption.
But given the good sales in the previous quarter, the brand executive told analysts on Wednesday that they expect China's tourism spending to rebound in the future.
Tiffany CEO Alessandro Bogliolo also said: "We can speculate on the reasons for the decline in Chinese tourists' consumption abroad, but the fact is that the Tiffany brand is attracting Chinese consumers."
But this is still not enough to stop investors from being disappointed with other aspects of Tiffany's earnings. The media analysis said that higher spending on marketing, technology and digital investment did indeed lower the company's profits. Tiffany also said yesterday that the full-year profit forecast remains unchanged, which has raised concerns that the performance of this boutique jeweler after the start of the holiday may not be as good as expected.
Despite the disappointing results, Tiffany's efforts to attract young consumers seem to be working. Tiffany has partnered with celebrity endorsements such as Elle Fanning, A$AP Ferg, Maddie Ziegler and Kendall Jenner to enhance their image. Neil Saunders also pointed out that consumer tracking data shows that Tiffany has become increasingly close to millennials in recent years.
However, Tiffany’s stock price has fluctuated abnormally this year, and it has been “returned to its original shape” after experiencing a wave of raids in May this year, especially after the company announced its third-quarter results that were less than expected. The stock price has fallen by more than 10%, and the annual increase has been wiped out in one fell swoop. The total market value is only $11.3 billion.
In Wall Street's investment banking institutions covering Tiffany, 12 analysts gave the company a “hold” rating, and another 12 analysts gave the company a “buy” rating. The stock's consensus rating is “buy”, the average target. The price is $131.75. Among them, ValuEngine's research analysts downgraded Tiffany's rating from "buy" to "hold" in previous research reports.
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