Pedestrians pass in front of flagship store Tiffany & Co. on Fifth Avenue in New York, USA, Saturday November 26, 2016.
Mark Kauzlarich | Bloomberg | Getty Images
Tiffany reported quarterly earnings on Wednesday that easily exceeded analysts' expectations, but revenues fell as protests in Hong Kong disrupted the sale of the luxury jeweler.
It also maintained the previously reduced outlook for the entire year.
Its shares rose 3% in premarket trading after initially jumping more than 5% of the news.
This is how Tiffany's fiscal second quarter ended July 31
- Earnings per share: $ 1.12 versus $ 1.04 expected
- Revenue: 1 $ 05 billion versus $ 1.06 billion expected
- Global same-store sales: down 4% versus 1.3% expected
"With the tough comparison with last year's strong performance in the first half of the year, and despite headwinds to weak demand from foreign tourists, exchange rate pressures and continued business disruption in Hong Kong, we actively manage what is in our control and position our brand to win, "said CEO Alessandro Bogliolo in a statement.
Net income for the quarter fell to $ 136.3 million, or $ 1.12 per share, compared to $ 144.7 million or $ 1 0.17 per share, the previous year. This was better than expected for $ 1.04, based on Refinitive data.
Sales fell to $ 1.05 billion from $ 1.08 billion a year ago, short of expectations of $ 1.06 billion.
Sales in stores worldwide that operated for at least 12 months were down 4%. Excluding exchange rate effects, they were down 3% during the quarter, the company said. It was worse than an expected fall of 1.3%.
Tiffany said sales of the same store in the US were down 4% in constant currency, while analysts had asked for a 1.7% drop. In the Asia-Pacific region, sales of the same stores increased by 1%, better than an expected fall of 0.2%. Tiffany said it had "strong growth" in mainland China, but "softness" in Hong Kong.
The Tiffany stock, valued at $ 10.1 billion per Tuesday's market terminal, has fallen more than 35% in the last 12 months.
Earlier this year, Tiffany trimmed the outlook for the full year, citing the impact it will have due to increased tariff rates. It is also blamed for a strong US dollar and lower spending on tourists hindering recent results. The largest market, America, has also seen sales decline, despite Tiffany's attempts to sell more directly to consumers and to rebuild its flagship Fifth Avenue store in Manhattan.
For the fiscal year ending January 31, 2020, Tiffany continues to require global sales to increase globally by a low-digit percentage, and for net earnings per share to increase by a low- to mid-digit percentage.