Strong demand for solitaire jewelry boosted Tiffany's profit and sales in the latest quarter. But as Fred Katayama reports, its comparable store sales unexpectedly fell.
Tiffany's top and bottom lines sparkled, but not sales at existing stores. The upscale jeweler's quarterly profit and sales rose and beat analysts' expectations. Boosting those results: strong demand for its fashion and high-end solitaire jewelry. Sales inched higher in the Americas. Strong demand in China lifted Asia sales 15 percent. To better take on newer players like Blue Nile and Pandora after several quarters of weak sales, Tiffany has refreshed its lineup, offering lower priced fashion jewelry. It also launched high end designs like the Tiffany T and Tiffany HardWare collection. But sales at established stores unexpectedly crawled lower. The culprit: lower spending by foreign tourists visiting the Americas. Consumer Edge Research retail analyst David Schick said, "New CEO Alessandro Bogliolo indicated there is potential in the medium to long-term for 'meaningful' comp store growth and higher operating margins overall, and we tend to agree." Schick says the holiday season remains key for the company. Tiffany shares, which have outperformed the broader market this year with a 21 percent climb, fell at the start of trading Wednesday.