Tiffany reports rebound in Aug-Sep

Positive sales trends are continuing in October. Globally, e-commerce sales continued to show strong growth, nearly doubling in the two-month period from the comparable period in 2019 and representing 13% of total net sales year-to-date through September 30. E-Commerce sales have historically represented approximately 6% of total net sales. Sales in Mainland China remained extremely strong and the Tiffany T1 line, the Company’s newest gold and gold with diamonds jewelry collection, continued its strong performance during the two-month period.

Despite the dramatic decline in tourism in the United States in 2020, sales in the United States declined by a low double-digit percentage in the two-month period relative to the comparable period in the prior year. This represents a meaningful sequential improvement since May 2020 to sales declines in the United States each month relative to the same month of the prior year, and the Company expects the sales trends in the United States to further improve in the fourth quarter.

Chief Executive Officer Alessandro Bogliolo said, “While we still expect full-year results to be substantially impacted by COVID-19, we are very pleased with the way the business has rebounded following the first quarter and continues to rebound in the third quarter, especially in Mainland China, and to recover in the United States.”

Tiffany’s cash balance continued to be in excess of $1 billion at September 30 and is expected to be approximately $900 million at year-end, which assumes the repayment of a $500 million draw earlier this year on the Company’s global revolver and capital expenditures for the full year that are flat to 2019 and approximately 30 percent below the 2020 pre-COVID plan. The decrease in capital expenditures relative to plan largely reflects costs deferred to 2021 due to the legally mandated temporary shutdown of the Fifth Avenue flagship renovation earlier this year and the Company’s decision to defer certain planned store openings and renovations to 2021.

The Company currently expects a mid-single digit percentage decline in sales and a mid-single digit percentage increase in operating earnings in the fourth quarter of 2020 relative to the same period in the prior year. Fourth quarter diluted earnings per share are expected to increase from the year-ago period by a mid-to-high single digit percentage on an as-reported basis.