Will diamonds ever go out of fashion? Nope, at least not according to Tiffany & Co.'s most recent earnings report. During the second quarter of the year, which wrapped up July 31, the company's global sales rose 7 percent to $993 million, ultimately bringing in $124 million in net earnings.
The growth owes partly to strong results in Asia-Pacific, where the jewelry retailer has opened five stores in the last year. Over the course of the first half, the region's sales jumped 15 percent to $498 million; that's $237 million in the second quarter alone. The Americas and Europe came in at 9 and 8 percent sales growth, respectively.
Thanks to an increase in Japan's consumption tax that went into effect on April 1, consumers' purchasing activity dropped dramatically midway through the first half. After growing 20 percent for the first quarter — that would be shoppers capitalizing on lower tax rates while they could — sales in Japan sank 13 percent in the second to $119 million, a pattern that Tiffany says it expected and which was consistent for other retailers in the country.
Globally, same-store sales growth came in at 3 percent globally, with the company opening a net of 16 new locations in the last year.
This strong growth follows July's news that Tiffany's current CEO, Michael J. Kowalski, will be stepping down after 15 years at the helm of the iconic jeweler and will be replaced by president Frederic Cumenal. In early August the brand launched a minimalist new range of metal pieces, Tiffany T, that's all about stackable rings, simple bracelets and chain necklaces — in its release, Tiffany called it "unapologetically modern," which also translates to "appeals to wealthy girls who get their ears pierced at New York Adorned."
We're particularly interested to see how that collection goes over with consumers in the third quarter. For the time being, it's pretty clear that nobody is getting tired of the classic collection anytime soon.