Tiffany & Co. reported a drop in third-quarter profit, underlining how the iconic American jeweler needs a revamp after agreeing to be acquired by French luxury conglomerate LVMH for $16.2 billion.
Earnings per share of 65 cents missed the analyst consensus of 85 cents. See more results here.
Key Insights
-LVMH is buying a business that has struggled amid lower spending by international travelers to the U.S. and as disruptions in Hong Kong persist. Chinese tourists have been a particular source of worry as trade tensions with the U.S. remain front and center.
-Chief Executive Officer Alessandro Bogliolo has worked to bolster results in the U.S. by appealing to younger shoppers. That’s had limited success as same-store sales in the Americas dropped four per cent. The company put the blame on fewer purchases from foreign tourists.
-Bogliolo has kept a focus on expanding in China, which has been a growth engine for the company. Sales increased more than 10% in mainland China in the quarter, though Tiffany said it has significant disruptions in Hong Kong due to the protests there.
Market Reaction
-Tiffany shares fell 1.3 per cent in premarket trading. They have jumped 66% this year through Wednesday’s close, with most of the advance coming since LVMH made an initial bid to buy the company in late October.
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