Global net sales for the second quarter increased 3 per cent to US$960 million (AU$1.2 billion) and 2 per cent to US$1.9 billion (AU$2.3 b) for the first half of 2017, ended 31 July, when compared to the same periods in the previous year.
Meanwhile, same-store sales for the second quarter declined 2 per cent, while same-store sales for the first half also fell 2 per cent.
In the Asia-Pacific region, which includes Australia, sales totalled US$235 million (AU$296 m) in the second quarter and US$492 million (AU$620 m) in the first half. This represented an increase of 2 and 5 per cent respectively when compared to the previous year’s corresponding periods; however, same-store sales declined 7 and 5 per cent respectively.
The company’s financial statement referenced three main reasons for the rise in sales.
“Management noted an increase in wholesale sales of diamonds, increased wholesale sales in the Asia-Pacific region and strong e-commerce sales growth,” it read.
“Overall, growth in fashion and designer jewellery sales contrasted with softness in other jewellery categories,” the statement added.
Tiffany & Co’s diamond manufacturing subsidiary business is called Laurelton Diamonds. According to Bloomberg, the business operates a worldwide supply chain that cuts, polishes and supplies finished stones. It is believed to supply diamonds for both Tiffany & Co as well as third party companies, and is recorded in financial statements under the category of ‘other sales’.
‘Other sales’ increased 74 per cent to US$32 million (AU$40 m) in the second quarter and 51 per cent to US$61 million (AU$77 m) in the first half of the year. The rise was said to be “entirely” due to the increased wholesale sales of diamonds.
Looking to the future
Commenting on the results, Tiffany & Co chairman of the board and interim CEO Michael Kowalski said while net earnings rose in the first half, the company remained determined to improve same-store sales through a continued focus in jewellery and luxury accessories.
“We were delighted to recently announce the appointment of a new chief executive officer, Alessandro Bogliolo, an accomplished jewellery and luxury retail executive who will soon join Tiffany,” Kowalski added.
As previously reported by Jeweller, Tiffany & Co announced the appointment of Bogliolo in July after the abrupt departure of his predecessor Frederic Cumenal in February.
Bogliolo will assume the position by 2 October 2017 and will also become a board director.
At the end of July 2017, Tiffany & Co operated 312 stores globally, including 85 in Asia-Pacific, 124 in the Americas, 54 in Japan, 44 in Europe and five in the United Arab Emirates.
More reading
Tiffany & Co’s new CEO expected to ‘accelerate revenue’
Tiffany & Co sales steered by fashion jewellery
Tiffany & Co sales at standstill
Tiffany & Co sales continue to fall