Tiffany & Co. comparable-store sales tank 44% in Q1 as Coronavirus shuts stores

Tiffany & Co. (NYSE: TIF) released its quarterly financial results on Tuesday that posted a massive 44% decline in comparable-store sales in the fiscal first quarter. The company attributed the decline to the Coronavirus pandemic that pushed its stores into temporarily shutting down in Q1. Tiffany had also missed analysts’ estimates

Shares of the company were reported less than 1% down in premarket trading on Tuesday. At £95.48 per share, Tiffany is currently a little under 10% down year to date in the stock market after recovering from a low of £87.76 per share in March. Learn more about value investing strategy.

Tiffany’s Q1 financial results versus analysts’ estimates

According to Refinitiv, experts had forecast the company to print £553.12 million in revenue in the quarter that ended on 30^th April. In terms of earnings per share (EPS), their estimate was capped at 2.37 pence per share. In its report on Tuesday, Tiffany fell short of both estimates posting a lower £438.32 million in Q1 revenue and swinging to a per-share loss of 41.82 pence.

At £50.97 million, the U.S. retailer’s net loss came in significantly higher in Q1 as compared to a net income of £98.63 million in the same quarter last year. Its revenue, on the other hand, registered a 45% year over year decline in the first quarter.

The American luxury jewellery and speciality retailer noted an around 85% decline in its same-store in China in the first month of the recently ended quarter, and another 15% decline in the second month. In April and May, Tiffany added, it saw early signs of recovery as COVID-19 restrictions started to ease. The NY-based company saw a 30% year over year increase in sales in April and a much broader 90% increase in May.  

LVMH is not renegotiating its £12.78 billion deal with Tiffany for now

LVMH showed interest in acquiring Tiffany for £12.78 billion in November. Owing to the health crisis and its subsequent impact on financial performance, however, CEO Bernard Arnault of the French multinational is now seeking to cut the price of the agreement. But considering the legal complications, the Louis Vuitton parent company has decided in favour of not renegotiating for now.

Tiffany & Co’s performance in the stock market was reported largely upbeat in 2019 with an annual gain of more than 60%. At the time of writing, the American retail company has a market cap of £11.69 billion and a price to earnings ratio of 27.46.