(Reuters) – Tiffany & Co, which is being bought by French luxury giant LVMH, beat Wall Street expectations for quarterly profit on Tuesday as the U.S. jeweler benefited from an over 70% rise in sales in China and a recovery in demand at home.
The results bode well for the upcoming holiday season for the jeweler and other luxury retailers in general, which have been hit hard by the pandemic. They also underscore the growing importance of sales within Mainland China to offset dependence on tourism, especially on Chinese tourists visiting fashion hubs like Milan and Paris.
“We had a strong third quarter …. which speaks volumes about the enduring strength of the Tiffany brand and gives us confidence as we enter the important holiday season,” Chief Executive Officer Alessandro Bogliolo said.
Tiffany said sales in the Asia-Pacific region rose 30%, while sales in the Americas region declined 16% – much smaller than the 46% drop seen in the preceding quarter.
Tiffany forecast a mid-single-digit percentage decline in holiday quarter sales, while analyst had predicted a 3% drop.
The hit from the pandemic also forced the New York-based retailer to invest in its online business and to introduce curbside pick-up at certain stores. This helped e-commerce sales surge 92% in the quarter.
Tiffany and LVMH ended a bitter legal battle last month and agreed to a new deal that would see the French firm buy out the U.S. jeweler at a slightly lower price of $15.8 billion, or at a discount of $425 million.
Excluding certain item, Tiffany earned $1.11 per share, surging past the average expectation of 66 cents.
Tiffany’s net sales fell about 1% to $1.01 billion in the third quarter ended Oct.31, but beat expectations of $980.71 million, according to IBES data from Refinitiv.
Reporting by Aishwarya Venugopal in Bengaluru; Editing by Saumyadeb Chakrabarty