Tiffany posts strong sales growth in China, appoints new directors
By April Kirstin Chua
Jewelry retailer Tiffany & Co. posts a three-percent decline in the year ending January 31, 2017, and a one-percent increase in the fourth quarter.
The results were consistent with its previously issued guidance for the 2016 fiscal year.
Tiffany's worldwide net sales dipped three percent in the year and increased to one percent in the fourth quarter. Meanwhile, in both periods, higher gross margins countered growth in operating expenses. Net earnings per diluted share plummeted one percent in the full year and two percent in the fourth quarter. Tiffany & Co. generated more than $700 million of cash flow from operating activities in the full year.
The high-end jewelry retailer has posted strong retail sales growth in China, increased wholesale sales in Korea, a decelerating rate of retail sales decline in Hong Kong and varying performance in other countries.
In Japan, the company's total sales saw a 15-percent increase to $185 million in the fourth quarter, and a 19-percent increase in comparable store sales.
Sales in its home US market is struggling, especially at its New York store, which is close to Trump Towers. Access to it was disrupted because of the extra security measures on the building.
Michael J. Kowalski, Tiffany & Co. chairman of the Board and interim CEO, said he believes the company's strategies are solid enough and will have meaningful opportunities for growth.
"Our management team is focused on accelerating the execution of our strategies to deliver extraordinary products, communications and experiences that will delight our customers around the world. Through strong leadership and this accelerated execution, we believe we are well-positioned to deliver attractive total shareholder return over the long-term," he stated.
Meanwhile, the company together with JANA Partners LLC, announced the appointment of three new independent directors to the Board. Tiffany & Co. names Roger Farah, James Lillie and Francesco Trapani as directors effective last March 6. With their addition, the Board will increase from 10 to 13 members. In addition, Trapani will join the Board's nominating and corporate governance committee and search committee to oversee the company's previously announced search for a new chief executive officer.
Tiffany also announced that it will limit waivers under the retirement age provision so that one current director will not stand for reelection during this year's Annual Meeting of Shareholders and two current directors will not stand for reelection at 2018. In regards to the appointments, Tiffany & Co. has also entered into cooperation agreements with JANA Partners.