(Bloomberg) -- Tiffany & Co (NYSE:TIF).’s revitalization efforts hit a snag in the third quarter as the luxury jeweler’s new designs and marketing failed to lure enough shoppers entering the critical holiday period. The shares fell as much as 13 percent in pre-market trading.
- Same-store sales rose 3 percent in the third quarter on a constant currency basis. That falls short of analysts’ average estimate for a gain of 5.6 percent.
Key Insights
- Tiffany cited “mixed results” in parts of Asia, including a decline in wholesale travel-retail sales in South Korea. That could heighten concern in the luxury industry about the health of Chinese spending amid reports of a customs crackdown on unauthorized imports.
- The jeweler enters the crucial holiday season in need of a boost. Chief Executive Officer Alessandro Bogliolo and head designer Reed Krakoff have sought to re-imagine the 181-year-old jeweler to appeal to younger shoppers, but the results show work remains to be done.
- The company has ramped up marketing heading into the holidays. Selling, general and administrative expenses rose 15 percent in the quarter, though that’s below the previous period’s growth rate. Tiffany has brought on younger celebrities, such as Elle Fanning and Maddie Ziegler, to represent the brand in its advertising.
Market Reaction
- Tiffany shares fell as much as 13 percent to $91.50 in early trading. The stock had soared to a high of $139.50 in July, propelled by the rebound in sales, before declining in the second half of the year as optimism fizzled in Wall Street.
- For more on the results click here.
