TIF - Earnings call transcript Q3 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, everyone, and welcome to the Tiffany & Company's Third Quarter 2017 Conference Call. Today's call is being recorded. Participating on today's call is Mr. Mark Aaron, Vice President of Investor Relations; Mr. Mark Erceg, Tiffany's Executive Vice President and Chief Financial Officer; and Mr. Officer. Executive Chief Bogliolo, Alessandro At this over turn call like I Mr. would to to the time, Mark Aaron. ahead. go Please

Mark Aaron

forecast. Thank financial you Bogliolo Mark results, day, observations, I that the offering and will good on few Erceg which Tiffany's results are call, a of third in rest new will pleased he we then will comment CEO, a his review and Alessandro of will and do by everyone. begin the initial On moment. today's sales quarter

continuing, statements are that statements. materially Before that or are these statements. not or Actual differ implied call note on this in forward-looking assumed, please made might results planned, historical forward-looking from expressed by expected facts the results

The to any am by XX-Q, is to or X-K. Form including differ in Tiffany's Additional introduce as obligation Exchange required X-K And Securities company applicable filed no and forth today to Form Bogliolo. Alessandro materially under that concerning information or to risks, results except and set events I XX-K, factors, now, filed news statements of subsequent release Commission, regulation. uncertainties and with forward-looking cover reports circumstances, the the actual undertakes could revise pleased law cause or update reflect

Alessandro Bogliolo

months. to you. look to coming you, you to forward of have and to am Thank I briefly pleased the in I opportunity this introduce myself meeting many

at a Jersey. Tiffany. have I I years formidable as Tiffany I first so in begin I logistic met of of with York, also impressed and and in to of about a respected the extraordinary many for skills Asia-Pacific, regional many far very traveled that manufacturing am here New I saying weeks spent am XX visited my members New and Let our and In as our and glad sites design unique our I at Rohde States; and visited with by the passion excited at in long HQM seven Japan, stores three brand. am Americas, me jewelry very I in Island, competitor. I Tiffany, have the have Bulgari, and and business the United and house be teams, their

hundreds We engravers. hand of skills, jewelry multimillion Tiffany with to the position that thanks healthy opportunities supreme Tiffany their everyday a setters, exceptional I operations and artists, is tremendous brand dollar & stone quality. with creations one-of-the-kind to jewelry accepted to I internal have consistent to with truly It's strongly from believe can assortment robust such Co. because their powerful them hands [ph] offer this grow. that

forward, move and we to As we course we will integrity. always true will heritage appropriate, plan and of course as brand remain our leverage adapt while our

pace product will innovation. We be of the accelerating

We marketing are most communications. focused on the effective

is assure can supply sales our and to we company the I passionate am to We At growth time, recently great opportunity. long-term. given I will in-store and chain experience, position. and enhance capabilities continue the by delight and online further our strong our shareholders. employees, customers, believe reward inspire solid our has our our to financial capabilities the reinforced will and competitors you, us, have the be that same this our be honored than acknowledge am the posted of Tiffany, stronger growth in I not acceptable some about which increasingly I

I the persistently to that you I months. financial then with say will back healthy to I I return Board to you. continue our in I thoughts coming to Mark. the performance to appreciate expect long-term achieve have call us. can As you you your Thank very come in assure now, interest great work company. have that from be we the my And to our Directors, further business, more study reviewing will of this will and

Mark Aaron

us. with Alessandro Thanks sharing those thoughts Okay. for

Now, let's look at the results.

the of largely unchanged, underlying and a tax growth result was designs, of volume, was expense line of had to a what an growth. expected. results. organizationally, As and net and jewelry some solitaire rate elected And categories. directors than chairman. collection, higher Alessandro watch bit with very growth growth It not and as declined Asia-Pacific, Gross by of overview, which X% again to in was fine SG&A was were in effective a in of indeed and a sales was new jewelry factors pleased a a the increase encouraged and see sales a board sales Tiffany lower. Other and continuation We total up. roughly the in jewelry was high stores in higher also third The bit Important added net price. resumption driven we We joined earnings that in jewelry, quarter Farah three expenses new introduced Japan the reflected was pleased a was see our but some quarter. Roger were its and fragrance. active Comparable to new growth rose unit Americas us fashion we and store margin the with Europe. were in

Let's constant Results any of look whether there terms currencies. in interesting rose X% all Americas, on rate the except In to weakening not higher the against store dollar while attribute jewelry. is sold worth will from customer the been trend an bit a quarters certain to in in unit Comp to of see a the sales were there sales reported. were number engagement of quite continued rose performance we due at mix variations region, around It recent categories U.S. store geographical coming to in to the sales region's foreign exchange increase the the activity. impact by materially tourists sales across the growth in of highlighting. significant no each performance basis recent has And spending There than as different quarter. in slightly be jewelry lower. customers region. the local In quarter,

showcases reopened we tea accessories lunch market. And dramatic say are store experience. we the the Worth York fourth or Fort is Based our our the floor store relocated Texas, store fast floor tradition. recently the York U.S., in The quarter and And opened Tiffany new Worth, opened enjoy in now every our on at a newly and queues to collection. the Fort your in In Cafe Century the Dallas pleased renovated New you breakfast we becoming our new day, a that New fourth in third in on our flagship home offering and Box presentation we City, can our cafe California. Blue newly a During store, floor. representing long

selection Rockefeller pop-up Station, Central Manhattan hubs Officer, the offer brand and opened in in recently New are Grand shops Yorkers are our For And tourists. in Center the those and by shops. sales including first the gifts time a and two ever, excited of Reed we which important new shops two home both to collection These curated Artistic jewelry potential and we hardware including about the Chief exposure Krakoff, accessories collection. and new from for

pop-up four Holt in in shops opened Renfrew Canada. stores department also We

a effect Korea in sales and to stores X% Comp turn increased let's to a free jewelry up in of region's Asia-Pacific The constant basis. growth exchange growth wholesale comparable new duty Now in unit came store the on support sales stores. Mainland due rate China, sales, the strong increase strong to sales categories. region of increased very continuation from experienced the across volume which quarter

we Mainland Hong growth see year with years sales While we Kong were declines. flat of encouraged China, also after were almost with pleased last sales three to in substantial in

the spending, part comp affected lower least at However, region's overall countries in which other Chinese to some declines tourist we results. attribute

relocations planned During yen the to a of quarter, the The China, opened we several the picture the openings in Sales fourth quarter. store versus was dollar. good in Japan. reasonably declined Wuxi, on a one and in basis due weakening and GAAP have

to increase third on rate However, equal constant basis. jewelry offset A average in by a sold last in quarter price. exchange were an sales unit was decline year

of reminder, sold a a were exchange basis had a on Comp a year. flat. increase So large as constant last sales rate on decreased unit number but basis, stores GAAP the

comp publicity show. tough year were store sales quarter. up when planning least during a We that partly store television fourth comparison favorable openings from tied at believe closings last the There the increase we are extensive no for we go against was or in quarter popular to the a

Sales rose surging comps last the strong continental declined in keep total the Europe, in spending declined. but this GAAP to strengthened countries. slightly weaker rate in have London Turning foreign to time U.K. saw result. the sales tourists in up pound. a very attributed which Total on that we euro increased were months mixed basis, to due up price and GAAP to basis a constant Europe, recent sales results. we exchange were in at and year most pound The a growth in bolstered when volume. mind was and reaction On On total sales

of in added And the to when in on a store Russia we the store representing business During opened we the heart a our Store, Petrovka second Selfridges we eleventh Moscow England opened in Birmingham, quarter, in store Department U.K. Street. successful our in

a with Galleria quarter, in Abu in Abu with mall Dhabi quarter closed This a to increase Lastly, UAE. expect also it to lower Dhabi of store segment sales are their the the see we declined in quarter. sales X% to And new comps segment year. the third operate that store that in stores replace our the entirely due improved other in pleased four our diamonds. wholesales during includes but the We next we in

In faster out than addition to at these should growth. pace sales overall slightly point ecommerce that increased I highlights, sales a sales

after continue the to to continue certainly channel experience. that will online customers in-store and information most be their We are marketing, to still invest digital online and attracted will but the in believe getting

we the results product Tiffany solid the the launched the We're quarter, and which fashion pleased see in categories to collection. very total we with collection category. earlier in in jewelry at year, the the recently to new for SKUs Looking added hardware growth in continue

extensions in regard, by in we designs of included Victoria high quarter. jewelry popular jewelry and were jewelry of and pointing Web quarter, in Tiffany expanded de Near the program and our our of our in site solitaire earring, we fine build-your-own lis see construct and the in quarter. a yellow an recently solid And we their in led collection, Soleste charm a growth mentioning existing Tiffany and the also pendants, launched to to which to In We collection. interesting end category, growth spans the diamond sales in the which design keys new allows the it's collection. bracelets, it's jewelry out Partly had fine on In continued fleur growth very personalize increase the and worth tea that and the rings. offsetting fashion engagement the underperform both customers high successful those diamond was own resumption categories worth quarter sales iconic that jewelry pleased where collection. includes

While wide a Tiffany dominant customize we that some rings. also have ring we believe wanted ranging assortments, observed own offers customers and to diamond their

in the ring we a metal. customers program allows that Canada In recently growth several been personalize there non-jewelry We're our introduced choosing setting, watches, separately in As saw reactions the result, by categories Tiffany progress a stores a diamond favorable U.S. and with good our in cut, pleased collection quarter, to a initial women. to and we for new and Metro their as well. very in Watch has

more spans We new Tiffany and is than already earlier, stores is collection as solid signature months our We've price to recently I being comparable accessories met select Tiffany's XXX new our reiterate in to collection as well a distributed both you quarter stores growth. both many with The now fragrance point sales in online whimsical worldwide. I launched stores. also of of priority wide mentioned functional which globally. popular and is that home recent item, in and our and And introduced want drive now top strategic and available we other the in in store as range

the increase modestly to Mark is visits that, the and While call growth. contribute increased and margins each now frequency to and it future, pleased to driving With through the store growth of to in rates that over we will e-commerce expect ultimately year I'm turn earnings square Erceg. higher comparable customer footage sales conversion

Mark Erceg

Thanks everyone. good Mark, and morning,

growth continued ago. importantly, financial the X% sequential long-term in include year-to-date sales our in obviously the of and were that earnings and X% earnings Third share being after X% the towards X% store in range, sales single-digit in third X% was fiscal per in in first is per progress growth which down And year down the third of net diluted quarter made plus diluted sales, progress which below reflect Worldwide but quarter comp mid share growth high versus quarter. earnings some the quarter results single-digit quarter to goals, quarter growth. down second X% brings growth

will to we are across lot quarter that encouraged more sales and third a of comparable sustainable with be all the we regions. we that stating satisfied and have results, we risk work meaningful while achieve we store the not also acknowledge So, do, obvious until growth

the expense points the were for in Moving of coupled we generally benefit Modest to to the meaningful gross in was input sales increased remain roughly to X.X%, expenses prudently across a growth benefit expectations. now have year. sales. decline We increase increased consistent third points. on, where with up well X.X%. operating by to XX reinvest free grown as diminish full investment XX costs in basis, line gross basis savings what commodity costs, while offset sales was higher reducing and has due categories. that continued been unchanged Also, growing reported to on margin; by gross as in the in Sales to depreciation goes third previously wide from prior managing order SG&A growth which a tied SG&A and part by the to are have ongoing gross incentive year committed roughly expenses basis sales margin versus SG&A with with contributor to costs, general, in allowed with feasible expansion in and to lower margin cost is expand increased stated, expect Selling, business. labor the balanced with margin dollars Consistent initiatives. we our mix On line a seeing be range wholesale quarter and due quarter of growth partly expenses of administrative growth year-to-date costs to a our as sales as price various store we product points diamond compensation occupancy and margin

solely which as roughly year faster-than-expected was which standpoint, which From tax calls October $XXX the months year last expenditures the stockholders We inventory the reported, of The $XX over X% to invested the year-to-date rate above in now growth, the buy per charges in billion but finished still up with have at timing million effective which full than the quarter expenditures by share as forecast $XX $XX representing XX.X%, year cost expect somewhere last and essentially to to the flow selling same low third balance to $XXX assumed million unchanged tax year it were is to slightly annual an quarter. on expect deliver and remain somewhere CapEx range a more we flow in for that operating increase forecast range. were and the high you margin effective was $X.XX more shares below the at in GAAP increase recall has to X% forecast year. rate as gold we XX.X%. call quarter of between for in our full July Simply Our second to increase increased other free single-digit turn cash process with over year, this $X.XX $XXX to during expectations when and and during of of year's million for margins couple be to of below share, our basis, Interest continues key excluding our year's sales investments operating the ago. to revision growth. spending $XXX to up one-third the per and excluded. sales third of be net debt and invested for of year full we raw manufacturing increase all has $XXX last to over now $XX which of below line share, mid that per the $XX last we we've and is revised total short-term charges. at million, slightly million continue with which in in in year total work may $X strong are of put, the this having $XX is XX%. single-digit full the we pace Net for expected were anticipate been rate Putting XX expenses spending change, average than doubled million year. million remains to internal our Relative targets was best quarter last EPS from X% we of XXXX's single-digits year's our been cash full a inventory for only and products rate pushed for we cash be points downwards Tiffany's to on diluted last rate invested material million with the approximately in sales continue net estimates several year, XX approximately year's sales. million $XXX million for in due only is third four of and at first of tax full expect X% approximately the Nonetheless, approximately cash, year together, levels. inventories over million quarter, increase approximately Because being of sheet past equity. Capital the inventories quarter, a to

Mark. order comp diluted while remain growth focused growth. share improving closing, made sharpening now I consistent in progress execution sales in and our to we call will and strategies turn quarter, to per sustainable back in store earnings was on So, our the over the generate

Mark Aaron

that to XX. November-December on and holiday results January for please your expect we report note our Alessandro sales Mark Thanks, Everyone insights.

of conference that we do not a As have release. reminder, call a

financial full expect mid-March have Q&A and when in we Alessandro report year results Mark. a our with that, to time for conference call we will with Beyond

For comments. today, questions listening. feel free for please Thanks any me with to call or

Operator

does X, replay, as until XXXXXXX. conference. you. available passcode A time be the and please And of be of will today, conclude today's December replay that is Thank or call this XXX-XXX-XXXX The XX:XX access AM To available will XXXX. dial Eastern XXX-XXX-XXXX.

Tiffany & Co (TIF) 29 Nov 172017 Q3 Earnings call transcript