Coronavirus takes shine off Tiffany's sales before LVMH takeover
Mar 20, 2020
Luxury jeweler Tiffany & Co forecast a significant results hit this year as it temporarily shut stores and said Friday it had lost about half of its operating days in mainland China since the coronavirus outbreak.
Tiffany, which is being bought by French luxury goods giant LVMH for $16.2 billion, said the coronavirus epidemic has had a significant effect on its performance so far in 2020.
This week it said it would temporarily close several outlets, including its iconic flagship Fifth Avenue store in New York, and cut working hours at others due to coronavirus.
“Our primary focus now is on preparing our Company, business and communities for the COVID-19 pandemic and the return to normal operations,” Tiffany Chief Executive Officer Alessandro Bogliolo said in a statement.
Tiffany did not give a forecast for its current fiscal year, citing the pending acquisition by LVMH.
Coronavirus has infected more than 245,000 people across the world and the death toll now exceeds 10,000.
Tiffany shares were up 1.5% at $127.99 in pre-market trading. LVMH, which already owns Louis Vuitton and Bulgari, is considering buying the U.S. jeweler's shares for less than its offer price on the open market, Bloomberg News reported.
Global stock markets have slumped since the coronavirus outbreak halted business activities, including travel and retail and spooked investors about a possible recession.
Tiffany said a first quarterly sales rise in a year in Asia-Pacific had helped it beat analysts’ estimates for same-store sales for its fourth-quarter ended Jan. 31, just before the rapid spread of the coronavirus stalled world economic activity.
Same-store sales, excluding the effects of currency exchange rates, rose 3% in the quarter, topping the average analyst estimate of a 2.01% increase, according to IBES data from Refinitiv. It also beat estimates for profit.
Tiffany said its focus on offering higher value items within each jewelry product category helped it drive sales in the fourth quarter ended Jan. 31, with the largest growth being in its gold and gold and diamond offerings.
Excluding one-time items, Tiffany earned $1.80 per share, beating Wall Street expectations of $1.77.
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