Shoppers exit the Tiffany & Co. flagship store on Fifth Avenue in New York, US.
NEW YORK: Luxury retailer Tiffany & Co said it expected earnings growth to resume in the second half of the year, helped by a healthy e-commerce business, a forecast that allowed investors to look past slightly disappointing quarterly sales.
The New York-based company also stuck to its fiscal 2019 revenue and profit targets, and its shares were up 3.6 per cent in afternoon trade. They earlier fell as much as 5 per cent when investors initially reacted to quarterly sales that narrowly missed Wall Street estimates. Weakening economic growth in China, especially against the backdrop of the trade spat between Beijing and Washington, has been a worry for luxury goods companies that rely on the country’s burgeoning middle class to boost sales. Two months ago, Tiffany had warned of soft demand in the holiday season because of low spending by Chinese tourists and weakness in Europe and at home.
“We have done a lot, a lot of new things, also things where we had made some mistakes, we are learning, and we are addressing it,” Chief Executive Alessandro Bogliolo said on a post-earnings call, adding he would have “started a holiday campaign three weeks earlier.” The jeweler has refreshed its collections with more affordable items such as pendants and earrings to appeal to millennials who gravitate to lower-priced competitors such as Denmark’s Pandora A/S and Signet Jewelers.
The retailer said its e-commerce business grew roughly twice the rate of its overall business. Later this year, Tiffany plans to launch an e-commerce enabled website in China to cater to the fast-growing market.
Bogliolo told Reuters on Friday he expects the company’s percentage of total sales that are online, currently at 7 per cent, to grow.