LVMH Earnings Call Notes

LVMH-Moet Hennessy Louis Vuitton’s (LVMHF) Management on Q3 2016 Results

Accelerated growth in Asia except for Japan

“Specifically we saw accelerated growth in Asia with the exception of Japan and continued good momentum in the U.S. and Europe outside of France. Both Japan and France were impacted by lower tourism or be it for different reasons or rather lower tourist spend.”

Improvement particularly in mainland China

“With regard to Hong Kong and Mainland China, there was some improvement there, particularly in Mainland China. The global business for the Group improved markedly from mid single digits in H1 to mid teen in Q3. So about as I said a marked improvement.”

Can’t say whether its a trend

“the question you‘re asking is actually the right one, but I may return it to you, the answer to whether this is a start of a new trend, I absolutely don’t know. We’ve seen in the past already some quarters in which the Chinese nationals were doing much better than in the preceding quarters and it was short lived. I’m not saying it will be the case, but I’m not saying it won’t be the case and we really don’t know. So we are just experiencing much better numbers with Chinese nationals in Q3 that’s what I can say at this point in time.”

We don’t view e-commerce as a big opportunity

“Finally on eCommerce you know our feeling on eCommerce, which we don’t view in itself as a big opportunity. We believe very much in the digital content of the selling experience having in mind that more or less all our clients before shopping within our stores grow on the website of the brand before. So basically we have to make a breach between the website and the store in a stronger way. So that’s what we have in mind and we also believe a lot in e-marketing particularly on the full network. It was — two years ago, it was not clear what we could do there, but now it becomes much clear. eCommerce is obviously something we need to have. We need to offer the feature to our clients, but in itself we don’t expect these to become a big, big channel otherwise it would have be the case already I would say.”

There is no way that we can do business with Amazon

“Third question on Amazon, I would say that no, not really the existing business model of Amazon, we believe that the existing business of Amazon doesn’t fit with our — doesn’t fit our luxury full stop, but also doesn’t fit with our brands. If they change the business model, I don’t know, but with the existing business model, there is no way we can do business with them for the time being.”

Tiffany 2Q16 Earnings Call Notes

Tiffany’s (TIF) Management on Q2 2016 Results

Mark Aaron

6% decrease in sales in line with what we anticipated

“Worldwide sales were close to what we anticipated, declining 6% on both a GAAP basis and on a constant exchange rate basis, and generally continued to reflect the soft trends across regions that we’ve experienced for several quarters, which we attribute partly to domestic customer spending, but also to lower tourist spending, predominantly by Chinese tourists. However, we had a solid increase in gross margin and experienced less deleveraging of SG&A expenses than we had anticipated due to a slight SG&A expense decline, and our balance sheet remains strong. Looking forward, while the results for the quarter were a little better than we expected, we think it’s prudent to maintain our existing outlook for the full year. ”

Decline reflected softness in all regions

“So looking at second quarter sales results in more detail, the 6% decline in worldwide sales reflected varying degrees of softness in all regions. There was no translation effect on total sales as the stronger yen offset the negative translation effects from the stronger US dollar against other currencies. In the Americas, both total sales and comparable-store sales declined 9%, which we attribute to generally soft demand in US customer spending, as well as lower spending in the US by Chinese and other tourists, especially in New York and in other high tourism markets.”

We believe macro and political uncertainties softening high end

“We can only speculate on why domestic US consumer spending at the high end has been generally soft, but we believe that macro market and political uncertainties are likely playing a role in restrained consumer behavior.

Softness in asia but strength in China

“In the Asia Pacific region, total sales and comparable-store sales declined 6% and 12% in the quarter. The sales declines were due to a combination of lower average price, lower unit volume, and a shift in mix and reflected softness across much of the region. We were pleased with healthy total and comparable store sales growth in China, as well as in Korea. However, continued meaningful sales declines in Hong Kong, Taiwan, Macau, and Singapore contributed to the overall regional softness.”

Interestingly saw an uptrend in sales following the vote

“There’s obviously uncertainty and anxiety regarding the economic implications of Brexit, but, interestingly we saw an uptrend in the UK sales almost immediately following the vote. We believe that the weakening of the pound has made London a more attractive tourist shopping destination.”

Tiffany & Co 1Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

” It’s safe to say that we are pleased to begin the year with better-than-expected sales and earnings. Sales growth of 9% in dollars or 13% on a constant-exchange-rate basis”

“solid performance in Japan, Asia-Pacific and Europe, but sales in the Americas were somewhat softer than we expected.”

“Gross margin, although below last year due to product sales mix, continued to benefit from diminishing product cost pressures, as well as price increases”

“there was mixed performance around the Americas region but pronounced softness in the Hawaii and Guam stores that reflected less Japanese tourist spending.”

“Without a doubt, Japan sales growth in the quarter exceeded expectations more than any other region. In local currency, total sales and comp store sales rose 20% and 21%, respectively, with considerable strength in engagement jewelry and other higher-price-point categories.”

“It’s worth noting that we took a price increase in Japan on April 10, which, beyond addressing product cost pressures, also included an adjustment for the yen’s weakness. Based on the customary pre-announcement of a price increase in Japan, it spurred purchasing in advance of the increase. However, we did not experience the typical expected slowdown after that. So while we believe a portion of the first quarter sales growth certainly reflects the strength of our brand, we also attribute the unusual strength to recent reports of a surge in household spending in Japan, likely tied to the Japanese government’s efforts to stimulate their economy.”

“We continue to see diverging demand among product categories by price point, with diamond jewelry clearly outperforming silver jewelry.”

“We finished the quarter with 275 company-operated stores. Our plan is to open 16 stores this year and close 1 store each in Japan and Taiwan, resulting in a net addition of 14 locations.”

Ralph Lauren 1Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“The operational expertise of our global supply chain organization is one of the company’s most significant competitive advantages. Over the years, our sourcing and logistics team have navigated through not only the growing scope of our global operations across regions, channels and product categories, but also dynamic changes in input costs, all while meeting the company’s high standards of innovation and quality.”

“The extraordinary creativity that is a hallmark and point of pride for our company is matched only by tremendous merchandising discipline that has enabled us to maximize our market share potential.”

“Since we’ve assumed direct control of most of our strategically important merchandise categories and regions, we’ve learned that there’s a great commonality to our worldwide bestsellers. This insight is a foundational principle that grounds our global merchandising organization.

Centralized in New York in order to work in close proximity to Ralph and his design teams, we have built teams made of merchants representing our key regions around the world to work side-by-side in a highly collaborative manner, to conduct global line reviews and plan global buys. These teams work very closely with their respective brand teams across sales, planning and marketing in order to inform their thought process with real-time feedback on sales trend, product performance and marketplace dynamics. We are confident that over time, greater consistency of the product story will drive both product development and production efficiencies that will allow us to leverage our global growing scale and provide opportunity for continued gross margin expansion.”

“We believe a more centralized approach will ensure greater singularity of message, and therefore, global consistency of advertising, marketing and in-store presentations. Creating an even more direct link between Ralph’s vision and the consumer experience across all distribution channels becomes increasingly important as tourists traveling all over the world become a larger subset of our customer base.”

“We’ve learned a lot about the Chinese business. We’ve gotten a lot of feedback from the customers both in China, in Southeast Asia, in Europe and the United States. The good news is they are gravitating towards the same looks and categories and items. They clearly want luxury”

Coach F3Q13 Earninvs Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“North American sales increased 7% to $792 million from $738 million last year, with direct sales up 8% on a 1% comparable store sales gain. And, fourth, international sales increased 6% to $382 million from $359 million last year, driven in part by a 40% gain in sales in China, with a continuation of double digit comps. On a constant currency basis, international sales were up 14%.”

“352 retail stores and 191 factory stores in North America at the end of the period”

“China, during the quarter we opened one new location on the mainland, bringing the total number to 118 locations”

“we now directly operate 93 locations in Asia comprised of 49 in Korea, including one location we opened in the quarter, 27 in Taiwan, 10 in Malaysia, and 7 in Singapore”

“Japan, we closed two locations, taking the total to 191”

“The gross margin rate was 74.1%, up 35 basis points from last year.”

“there’s an interesting inflection happening in [North America] full price today, where we have a significant amount of leasing activity happening around leases that are coming due, which provides us an opportunity for repositioning, looking at market penetration, and potential downsizing of stores in select markets. In addition, we have significant lease rights built in, which allow us to take action, and on a select basis, underperforming stores.”

“On the factory side, frankly there’s a lot of development happening. There’s an enormous amount of new development and there we’re focused on select new market entries and new store entry, as well as maximizing the men’s opportunity with some repositioning in smaller stores.”

“on Japan, quite a similar story in the sense that there is very little development taking place in full price. Indeed, most of luxury full price distribution is through the department store channel, which is not growing, and has in fact been contracting for over a decade. Our focus there is on men’s distribution.”

“The [Men’s] business, we believe, in the medium term, is a billion dollar global opportunity. And the shifts that we’re seeing globally is the growth in the bag business.”

“Our strategy is obviously very different than the traditional European luxury brands who are much more focused on exclusivity. Coach is much more focused on being a selective brand”

TIF 4Q12 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“Clearly, we were not pleased with Tiffany’s financial results in 2012, which are not representative of how our company should perform in a more normalized operating environment. We faced more difficult-than-expected comparisons to some very strong sales results in 2012. We dealt with economic conditions in 2012 that were more challenging in some regions. We saw a pronounced softness in sales of entry-level-priced silver jewelry. And overall sales weakness led to a timing lag in realizing the benefit from a moderation in commodity costs.”