Wall Street gave Tiffany & Co. the thumbs-up after the jewelry retailer posted better-than-expected fourth-quarter results.Company executives during the morning conference call to Wall Street said strong sales in Asia helped with results. Also trending in the right direction were higher margins in fashion jewelry, particularly the more affordable pieces priced at under $500.Michael Kowalski, chairman and interim chief executive officer, said, “The fashion category is where we’ve enjoyed the most relative success, so I think that speaks directionally of some success in appealing to Millennials.”Earlier in the call, the chairman addressed the ceo search and said the company is presuming that “it may take time to find the right person with broad experience and brand management with a global perspective and who possess the strong leadership skills to motivate and inspire our Tiffany colleagues around the world.” Frederic Cumenal resigned his ceo post last month.He acknowledged that the luxury space has faced numerous challenges in 2016, and that management has not been pleased with the firm’s financial performance. He also noted that there are “substantial opportunities to grow our business.” Those opportunities depend on increasing the rate of new product introductions and innovations, maximizing marketing effectiveness and building stronger relationships with customers.For the quarter ended Jan. 31, net income fell 3.3 percent to $157.8 million, or $1.26 a diluted share, on a net sales gain of 1.3 percent to $1.23 billion. On an adjusted basis, diluted earnings per share were $1.45. Wall Street’s consensus estimate was $1.38 on sales of $1.22 billion.Shares of Tiffany closed up 2.7 percent to $92.42 in Big Board trading.Mark L. Aaron, vice president of investor relations, said during the call that U.S. sales in 2016 to foreign tourists remained at about 20 percent. And while Tiffany normally doesn’t break out individual store results, the company chose to disclose results for its New York flagship because of its location by Trump Tower and the impact of postelection activities. Aaron said the quarter’s sales fell “7 percent for the entire fourth quarter versus a 14 percent decline in the November-December holiday period due to some large transactions in January.”During the quarter, the Americas region represented 46 percent of worldwide sales, while Asia-Pacific was 25 percent. Japan represented 15 percent of sales and Europe was 11 percent.In the Asia-Pacific region, Aaron said Tiffany saw a “healthy rate of growth in the second half and fourth quarter that was generated by increases in jewelry units sold.” He also noted that lower spending attributed to Chinese tourism in other regions in 2016 may have led to higher spending by local consumers within China. He noted that Tiffany opened its 15th store in Korea and its first store in New Zealand in the quarter, as well as two stores in Australia. In Japan, he said the company achieved healthy retail sales growth and ended the year on a strong note. Aaron also said it was a “challenging year” for its European operations.As for trends, Aaron told analysts that the company saw higher gold jewelry sales attributed to the T collection from new designs. There was also improvement in fashion silver jewelry led by the new Return to Tiffany Love collection, as well as newness in silver jewelry and the growth in the number of items under $500. Also strong were Elsa Peretti’s jewelry collections Diamonds by the Yard and the Open Heart designs on the designer end. He added that the softest category was high, fine and solitary jewelry. And while there was “success of our Victoria collections in platinum and diamonds,” Aaron noted there was some softness at the “highest end of this category.”Randal J. Konik of Jefferies has a “buy” rating on shares of Tiffany and a price target of $110. He said, “Fundamentals are improving even before the new creative executive, new chief financial officer and to-be-determined new ceo have yet to act. We expect product newness to accelerate and company efficiencies will improve, leading to better earnings.”The company in January named Reed Krakoff chief artistic officer. The company in September named Mark Erceg its new cfo.
To celebrate Pride 2018, @themarcjacobs released the #GratefulNotHateful campaign, a social media initiative aimed at extending Pride beyond the parade. Inspired by Jacobs’ everyday outlook, the campaign features Jacobs along with a group of models and social media stars who are members and supporters of the LGBT community, all seen wearing @marcbeauty’s Highliner Gel Eye Crayons in colors of the rainbow. Head to our Instagram stories to see close-ups of the liner. #wwdbeauty
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About last night: @marycharteris and @adwoaaboah hit up Hyde Park for the Serpentine Galleries’ annual summer party held in partnership with @chanelofficial. Head to WWD.com to see more photos. #wwdfashion
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“Kate Spade was a true fashion icon who brought joy to the lives of women around the world, and inspired women to live life to the fullest. We are dedicated to carrying on her legacy,” said Anna Bakst, brand president and chief executive officer of @katespadeny. The Kate Spade Foundation announced that it will be donating $1 million to suicide prevention and mental health awareness in tribute to the recent death of Kate Spade. Read more on WWD.com. #wwdnews (📷: @chinseephoto)
A first look at @virgilabloh’s sneakers for @louisvuitton. Abloh spoke to WWD about his debut collection for Louis Vuitton, creating @kendalljenner’s #metgala outfit and redefining the heritage brand. Read the full story on WWD.com. #wwdfashion 📷: @alfredo_piola)
The world’s largest producer of denim @iskodenim is sharing the strategy behind its product development process. Read our full interview with ISKO’s product development manager Baris Ozden on the company’s extensive research practices, upcoming denim trends and the latest material innovations on WWD.com. #iskodenim