Tiffany 3Q16 Earnings Call Notes

Tiffany (TIF) Q3 2016 Results

Mark Aaron – Vice President, Investor Relations

Sales in the US pressured by macro

“Sales in the U.S. were again pressured by lower spending attributable to local customers, which we believe was tied to macro, market and political uncertainties. Interestingly, spending by customers that we identify as foreign tourist actually rose in the quarter in contrast to a decline in the first half, as continued lower spending attributed to Chinese tourists was more than offset by increased spending attributed to visitors from Japan and elsewhere.”

Effect of Trump on 5th Ave store

“There certainly has been a lot of attention focused on the potential effect of activities related to the recent U.S. Presidential Election on stores along the relevant part of Fifth Avenue. What we’ve seen has been some adverse effect on traffic in our Flagship store, as well as the continuation of sales softness relative to last year and to our other U.S. stores this year. Because of obvious uncertainty, we will maintain a cautious outlook in the near-term and we cannot provide any assurance that sales in these both in the fourth quarter and beyond will not be negatively affected.”

Soft demand across Europe

“Demand across Continental Europe remained soft, although, varying degrees and has been especially soft in Paris since the tragic events of last year. Economic conditions also likely contributed to weak spending by domestic customers in many countries.”

Fashion jewelry strongest, statement jewelry weakest

“The best performing jewelry category was fashion jewelry, which posted a modest increase over last year. This was driven by an increase in gold jewelry sales tied to the strength of the T collection, which we have continued to build upon with new designs… At the other extreme was continued softness across the statement, fine and solitaire jewelry category, led by decline in high-end statement sales, which in contrast had posted strong growth last year, performing roughly in line with the prior year on a worldwide basis was the engagement jewelry and wedding bands category, with results varying by region.”