New York--While results were mixed for Tiffany & Co. globally, sales in the U.S. market were relatively strong, led by consumer demand for fashion jewelry in karat gold.
The New York-based retailer reported Tuesday that same-store sales in the Americas rose 11 percent year-over-year in the third quarter ended Oct. 31. Total sales also increased 11 percent on a constant exchange rate basis, reaching $459 million.
Stronger demand for gold fashion jewelry drove sales while entry-level price-point silver sales slumped, Tiffany said. “It’s worth noting that gold jewelry is performing especially well,” Mark Aaron, vice president of investor relations, said during the company’s earnings call Tuesday morning, noting particular success with both the new “T” and Atlas collections.
RELATED CONTENT: Why consumers are starting to love gold again
On a geographical basis, U.S. sales were healthy in most markets while local demand outstripped tourist demand at the company’s Fifth Avenue flagship store.
During the quarter, the company opened two new stores in the United States: one on Newbury Street in Boston and the other in the Miami Design District.
Globally, Tiffany reported that same-store sales were up 4 percent year-over-year while net sales reached $960 million, increasing 7 percent on a constant exchange rate basis.
Gross margin increased from 57 percent to 59.5 percent in the third quarter due to lower product costs and Tiffany raising its prices, as well as more sales of fashion jewelry, a category with higher margins than bridal.
Commenting on the company’s global performance, Aaron said during the call that while sales in the Americas were solid, other markets were “volatile.” The company noted particular softness in sales in Asia, particularly in Japan, which has just slipped back into a recession.
In a company statement, Chairman and CEO Mike Kowalski, who is slated to retire in March, said, “We were pleased with (our) overall sales performance, especially in light of economic and geopolitical challenges around the world. We … are especially encouraged with initial results from the recent launch of our Tiffany T jewelry collection.”
For the fiscal year ending Jan. 31, the company projects a mid- to high-single-digit increase in worldwide net sales and the opening of 10 new stores, including four in the Americas. One store in the Americas is expected to close.