Tiffany profit beat overshadows fall in tourist spending
(Reuters) - Tiffany & Co (TIF.N) beat quarterly profit estimates on Wednesday, as the luxury retailer cut marketing spending, sending its shares up nearly 3% before the bell.
The company also stuck to its full-year sales forecast, despite a fall in tourist spending dragging on sales and the protests in Hong Kong causing disruptions to its business in the city.
A protracted U.S-China trade war, stronger dollar and a stricter U.S. visa approval process have all led to a near 3% fall in Chinese citizens arriving in the United States this year, pressuring American retailers that are increasingly reliant on the high-spending tourists.
The United States could lose an estimated $3.8 billion in visitor spending from China in 2019, according to research firm Tourism Economics.
Last quarter Tiffany had suspended its digital marketing as it revamped its websites. The company's expenses fell 5% in the quarter, but said it expects to ramp up marketing spending in the second half of the year.
Tiffany's net earnings fell to $136.3 million, or $1.12 per share, in the second quarter ended July 31, from $144.7 million, or $1.17 per share, a year earlier.
Analysts had expected earnings of $1.04 per share, according to IBES data from Refinitiv.
Tiffany maintained its annual sales forecast of a low-single-digit percentage rise.
The company's quarterly same-store sales, excluding the effects of currency exchange rates, fell 3%. Analysts had expected a 1.3% decrease.
Net sales fell to $1.05 billion from $1.08 billion, missing Wall Street estimates of $1.06 billion.
Tiffany's shares, which have fallen nearly 12% this month on U.S. President Donald Trump's threats to ratchet up a trade war with Beijing, rose to $85.05.