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The American jeweller Tiffany & Co. exceeded expectations for its quarterly results thanks to the recovery of the luxury market in China and its consumption.
Known worldwide for its diamond engagement rings, Tiffany & Co is challenging market players with better than expected results and surpassing expectations on Wall Street.
Overall, sales in the Chinese market increased by more than 70%, particularly due to the recovery in demand in the luxury segment.
The US jeweller’s shares showed a slight increase, mainly due to low in-store inventories. But overall, Tiffany’s stock was able to gain $1.11 per share, against expectations estimated at only 66 cents.
After having recently been bought by the French luxury group LVMH, fears were focused on the drop in results due to the health crisis, which forced the jeweller to close a large number of its points of sale like the rest of the retailers.
The takeover of the American jeweller was far from being a piece of cake as the case went as far as a legal dispute. At the end of all the negotiations, the French luxury goods giant LVMH finally agreed to buy Tiffany & Co for $15.8 billion, i.e. at a discounted price of $425 million.
Some analysts estimated a 3% drop in sales, and at the same time a strong increase in quarterly profits in progress. In the end, Tiffany & Co’s sales fell by only 1% to $1.01 billion in the third quarter, and clearly exceeded expectations at $980.71 million.
Alessandro Bogliolo, CEO of Tiffany & Co, commented on these results: “We had a solid third quarter… which speaks volumes about the enduring strength of the Tiffany brand and gives us confidence as we enter the important holiday season”, and particularly emphasizes “the successful completion of the merger with LVMH in early 2021”.
The New York-based jeweler, which now has no less than 320 retail shops, is setting the tone for the possibility of reviving the heavily impacted luxury market and announces positive prospects for the imminent holiday season: “The third quarter results also reaffirm our confidence that the Tiffany brand will continue to shine during the holidays.” said Camilla Yanushevsky, CFRA analyst.
In addition, a second analysis based on data from this site, and from Alexa Internet, affirms a strong dynamic of traffic to the Tiffany website, according to Camilla Yanushevsky.
In short, the American jeweller owes this recovery to the population of mainland China, the largest part of luxury consumers, compensating for the impossibility of travelling to the world’s major fashion cities such as Milan and Paris.
Internationally, Tiffany & Co is performing well in Asia-Pacific after a net increase in sales of 30%, but much less well in America where sales fell by 16%, but still better than in the last quarter when the fall was 46%.
The global pandemic represents one of the worst years for the world of trade and luxury goods. The American jeweller has had to, like many shops, close 60% of its points of sale and transform its sales to the virtual, and invest in its website. In total, the jeweller managed to increase its online sales by 92% in the last quarter.
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The American jeweller Tiffany & Co. exceeded expectations for its quarterly results thanks to the recovery of the luxury market in China and its consumption.
Known worldwide for its diamond engagement rings, Tiffany & Co is challenging market players with better than expected results and surpassing expectations on Wall Street.
Overall, sales in the Chinese market increased by more than 70%, particularly due to the recovery in demand in the luxury segment.
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The American jeweller Tiffany & Co. exceeded expectations for its quarterly results thanks to the recovery of the luxury market in China and its consumption.
Known worldwide for its diamond engagement rings, Tiffany & Co is challenging market players with better than expected results and surpassing expectations on Wall Street.
Overall, sales in the Chinese market increased by more than 70%, particularly due to the recovery in demand in the luxury segment.
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