Shares of U.S. luxury goods firm Tiffany & Co. (TIF) remained stable on Thursday rising 0.05% to close at $131.39.The jewelry brand recently released its third-quarter results showing that it has almost resolved the crisis of COVID-19. Net profit has risen by more than 70% and the proportion of online sales is rising.
Tiffany’s revenues hit $1.01 billion in the third quarter, down just 1 percent year on year. Strong results were achieved, including 70 percent growth in China, which has recovered almost completely from the COVID-19 pandemic. The company came doubling its comparable sales year-on-year in that region, company stated at the time.
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The current business trend across the world contributed to a year-on-year rise in Tiffany’s online revenue by 92 percent. This segment accounts for 12 percent of the revenue of the company now. Earnings per share rose to $1.11 by more than 70 percent, more than 40 percent higher than the Wall Street’s expectations.
This year, Tiffany is seeking a merger that could be completed by 2021 with French luxury goods firm Moet Hennessy – Louis Vuitton SE (LVMH). The process of merger was not straightforward and also involved joint litigation. The transaction however is close to completion at this point. For LVMH, this may be a valuable acquisition, as Tiffany has proven the power of its brand and the ability to rebound from crises quickly.
As with several other stores, Tiffany has been struck by the pandemic. In addition, quarterly revenue dropped by 45%. Geographical diversification is however the strong point of the jewelry maker. Although retail operations are still constrained by the US and Europe, the Chinese market is already returning to its previous sales level. The suspension of tourist travel also helps to enforce it. Earlier, wealthy Chinese often bought premium products overseas, but now they are buying them in their own country.
Tiffany & Co. (TIF) stock saw a drop of nearly 20 percent many times this year but they recovered each time. The present price is approximately the same as the share price of $131.27 at the beginning of 2020.
