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Tiffany (TIF) Sparkles in Holiday Season, Posts Record Sales

Zacks Equity Research
·3-min read

In spite of lingering apprehensions associated with the ongoing coronavirus crisis, Tiffany & Co. TIF posted record holiday sales results. Strong sales in Mainland China and sturdy e-commerce business drove the upbeat performance. Undeniably, the company’s multi-year sales strategies, product innovations and increasing average unit retail prices have not only strengthened position in the global luxury jewelry market but also helped navigate through these challenging times.

A Sneak Peek into Holiday Sales

Tiffany, which is soon to be acquired by France’s LVMH, reported record net sales for any holiday period in its history. Markedly, sales momentum gathered in the third quarter continued through the 2020 holiday shopping season. This New York-based company stated that preliminary worldwide net sales increased approximately 2% during the holiday period — from Nov 1, 2020 through Dec 31, 2020 — compared with the same period in 2019. Again, comparable sales rose 4% during the said period.

Impressively, sales in Mainland China increased by more than 50% from the year-ago period. Tiffany’s e-commerce business displayed strength. Stuck at home due to the ongoing pandemic, Americans made online purchases. We note that e-commerce sales soared more than 80% during the holiday shopping season.

Geography-wise, net sales in the Asia-Pacific region surged 20%, while comparable sales climbed 27%. In Japan, net sales rose 8%, while comparable sales increased 10%. However, net sales in the Americas slumped 5%, while comparable sales declined 4%. In Europe, net sales decreased 8%, while comparable sales fell 6%.

Alessandro Bogliolo, CEO, said, “This year has certainly stress tested the corporate strategies we set in 2017 to strengthen the Brand and win in the highly competitive global luxury jewelry market.”

We note that shares of this Zacks Rank #2 (Buy) company have appreciated 7.8% in the past six months compared with the industry’s rally of 20%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Wrapping Up

No wonder, the holiday season, which accounts for a sizeable chunk of yearly revenues, is a make or break for retailers. Taking into account consumers’ product preferences and growing inclination toward online shopping due to social distancing, and greater stay at-home and work-from-home trends, retailers ramped up investments in digitization to provide a seamless shopping experience.

To beat the COVID-19 blues, retailers kicked off holiday shopping deals earlier this year with an extended promotional period to avoid rush at stores, given the health concerns. Markedly, Amazon’s AMZN two-day special Prime Day mega shopping event, Target’s TGT "Deal Days" and Walmart’s WMT five-day “Big Save Event” were held in October.

A report by Mastercard SpendingPulse indicates that holiday retail sales, excluding automotive and gasoline — from Oct 11 through Dec 24 — increased 3%. Meanwhile, online sales surged 49% during this expanded holiday season, and made up approximately 19.7% of overall retail sales, up from about 13.4% in 2019. The report went on to highlight that online jewelry sales shot up 44.6% year over year during the aforementioned period.

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Target Corporation (TGT) : Free Stock Analysis Report
 
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Walmart Inc. (WMT) : Free Stock Analysis Report
 
Tiffany & Co. (TIF) : Free Stock Analysis Report
 
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Zacks Investment Research