Political unrest in Hong Kong is hurting sales of Tiffany & Co.’s pricey baubles, the luxury jeweler said Wednesday.
The retailer, known for its Robin’s egg blue boxes, recently lost six sales days in Hong Kong — its fourth-largest market — due to political protests that have overtaken the Chinese territory for nearly 12 weeks, Chief Executive Alessandro Bogliolo revealed in an earnings call Wednesday.
The protests, which even shut down Hong Kong’s international airport, could dampen full-year earnings if they continue, CFO Mark Erceg warned.
“If, for example, the ongoing unrest in Hong Kong persists much longer at its current rate, we may find ourselves toward the lower end of our full-year reported sales and EPS guidance range,” Erceg said on the call.
The protests add to Tiffany’s looming concern about a drop in Chinese tourists buying its goods — thanks to the president’s trade war with China.
On Wednesday, Tiffany said it moved some of its most expensive items to Beijing and Shanghai to appeal to customers who used to buy in the US but are now staying at home.
The jewelry retailer said it’s also upgrading all three greater China flagships, including the one in Hong Kong.
Despite the headwinds, Tiffany just missed analysts’ revenue expectations for the second quarter. And its shares managed to rise more than 3% on better-than-expected income.
Earnings per share of $1.12 topped the analysts’ average estimate of $1.05, even though they were down 4.3% from $1.17 in the year-earlier quarter.
Tiffany blamed the decline on lower operating margins and a higher effective income tax rate.
Revenue fell 3%, to $1.05 billion — just shy of Wall Street’s estimate of $1.06 billion.