Tiffany & Co's results topped Wall Street estimates on Tuesday as a heavy advertising spend drew in both affluent and more price-conscious shoppers to its stores in the Americas and China, prompting the chain to raise its annual profit forecast.
Shares of the company initially rose as much as 6.5 per cent to $138.40, although they handed back much of those gains after the company said a renovation of its flagship New York store would eat into earnings this year.
The share price performance underscored the success of a turnaround under chief executive Alessandro Bogliolo and easing any concerns over the impact of US-China trade tensions on a business with a big Asian connection.
Bogliolo has poured more money into technology and marketing, luring social media celebrities such as Kendall Jenner to endorse the brand and enhance the feel and shopping experience at its outlets.
He has increased the chain’s focus on less expensive fashion jewellery while also launching high-end everyday home items such as $350 gold straws and $1,500 gold paper clips.
Selling, general and administrative costs rose 20 per cent to $497.6 million but the company’s gross margins were also up – at 64 per cent from 62.5 per cent a year earlier.
The company’s net sales of $1.08 billion topped the consensus estimate of $1.04 billion.
– Reuters
