- Tiffany reported third-quarter comparable sales that fell short of Wall Street estimates as spending by Chinese tourists slowed in some regions.
- The high-end jeweller also missed on both the top and bottom lines.
- Full-year earnings guidance also fell short.
- Shares plunged more than 11%.
- Watch Tiffany trade live.
Tiffany shares tumbled Wednesday morning, down more than 11%, after the company reported comparable sales that fell well short of Wall Street estimates.
The high-end jeweller said total comparabale sales, excluding foreign-exchange fluctuations, rose 3% in the third quarter, missing the 5.6% gain that analysts surveyed by Bloomberg were expecting. It reported earnings of $US0.77 a share on revenue of $US1.01 billion, missing the $US0.78 and $US1.05 billion that analysts were hoping for.
Tiffany said strong spending by local customers was offset by lower spending attributed to foreign tourists, primarily Chinese, in some regions.
“It is worth noting that in the third quarter our sales attributed to local customers continued to grow at a strong rate worldwide and were positive in every region, with particularly strong growth in mainland China,” CEO Alessandro Bogliolo said in the earnings release.
“Jewellery volumes also increased in the quarter and year to date. This resulted in mid-single-digit net sales growth in the quarter and even higher growth year-to-date, despite lower-than-expected spending in the third quarter attributed to Chinese tourists in the U.S. and Hong Kong and lower wholesale travel-retail sales in Korea.”
Tiffany reported a 15% jump in selling, general, and administrative expenses in both the third quarter and for the year, reflecting an increase in marketing spending and higher labour costs. It also increased spending on technology, visual merchandising, digital, and store presentations.
Looking ahead, the company said it sees full year earnings of $US4.65 to $US4.80 per diluted share, missing the Bloomberg consensus of $US4.83.
Tiffany was up 11.6% this year through Tuesday, trading at $US104.95 a share.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.