A 75.6 percent drop in fourth-quarter earnings and tepid sales outlook notwithstanding, Tiffany & Co. intends to stay on the sidelines of the current promotional furor running through the jewelry market.
“While we believe our sales were negatively affected by the rampant discounting of some other jewelers and high-end competitors, we did and will continue with our full-price philosophy in order to maintain appropriate margins and, very importantly, to maintain the integrity of the Tiffany & Co. brand,” said executive vice president and chief financial officer James Fernandez on the company earnings call Monday morning.
Pressured by the economic slowdown, Tiffany said it has focused and continues to focus on reducing costs and launching products to navigate the turbulent economic waters.
Cost cuts directly impacted Tiffany’s bottom line during the fourth quarter, when about 600 of 800 eligible employees in the U.S. accepted an early retirement package and the company opted to shutter its 16-store Iridesse pearl jewelry chain. The moves will reduce worldwide staff by about 10 percent and lead to pretax savings of about $60 million this year, but they also generated charges that subtracted 60 cents a share from earnings.
As a result, net income for the period ended Jan. 31 was $31.1 million, or 25 cents a diluted share, versus $127.4 million, or 96 cents a share, a year earlier. Excluding charges, earnings totaled 85 cents, 5 cents higher than the analyst consensus estimate listed by Yahoo Finance.
The better-than-expected result helped to catapult Tiffany’s share $3.14, or 15.5 percent, to $23.37 as the major indices shot up on word of the new Treasury Department plan for buying up toxic assets. (For more on the stock market, see page 14.)
Sales tumbled 20.1 percent to $841.2 million from $1.05 billion, in the year-ago quarter.
“Right now, the overall retail jewelry industry is under enormous stress. The industry is competitively fragmented,” said chairman and chief executive officer Michael Kowalski on Monday’s call. “We faced an unprecedented environment with profound challenges, but also with promising opportunities for Tiffany.”
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty