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Tiffany’s stock dropped as much as 12 percent in premarket trading on Wednesday after releasing disappointing third-quarter sales that were hurt by weaker spending from Chinese tourists in the U.S. and Hong Kong.
The luxury jewelry retailer’s earnings were in-line with estimates, but revenue of $1.01 billion was shy of the $1.05 billion estimate from analysts surveyed by Refinitiv.
Same-store sales also disappointed, with the company reporting an increase of 3 percent while Wall Street expected 5.3 percent. Europe and Japan both reported weak same-store sales. Europe saw a decline of 3 percent for the quarter, while Japan’s rose by only 1 percent.
Net income fell to $94.9 million, or 77 cents per share, from $100.2 million, or 80 cents per share, a year ago. The results matched Wall Street estimates.
Its full year outlook remains unchanged, with Tiffany estimating it will earn between $4.65 and $4.80 per share.
The United States, however, was a bright spot for the retailer, which saw a 5 percent increase in same-store sales in the region.
“On the sales side, we remain satisfied by Tiffany’s growth — especially within the American market where sales rose by 5%,” Neil Saunders, managing director of GlobalData Retailer, said in an email. “Some of this is related to the strength of the economy, with the increased affluence and confidence of middle and higher income consumers helping to boost spending on jewelry.”
Saunders also attributed strength in the U.S. market to Tiffany’s efforts to revamp its brand to appeal to younger consumers with marketing campaigns and new product lines.