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Tiffany & Co. Reports a 90% Sales Spike in China Following Reopenings

By Demitri Kalogeropoulos – Updated Jun 9, 2020 at 2:10PM

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The rebound has management feeling confident that the global business will recover from a huge global sales decline in the first quarter.

On Tuesday, Tiffany & Co. (TIF) announced a sharp global sales decline tied to COVID-19 related closures. But it also announced some potentially good news on the demand front.

Global revenue dove 45% in the fiscal first quarter, which ran from Feb. 1 through April 30 and was heavily impacted by the virus pandemic. Sales first declined as much as 85% in China where social distancing moves originated, before the demand slump spread to key markets like Japan, Europe, and North America. The luxury jewelry giant reported a $90 million operating loss for the period compared to a profit of $152 million a year ago.

A woman shops for jewelry.

Image source: Getty Images.

Management sounded an optimistic tone about the potential for a quick rebound, though, by describing how the Chinese market has responded to the end of aggressive stay-at-home orders. Sales declines lessened to 15% in March after February's 85% dive. Volumes then improved to a 30% increase in April and jumped 90% in May.

"The strategic decisions we took to focus our China domestic business, global e-commerce, and new product innovation are paying off," CEO Alessandro Bogliolo said in a press release, "even against the backdrop of a global pandemic."

Tiffany says its latest gold and diamond collection launch is off to a strong start despite lingering store closures in many markets. The chain is also optimistic that the merger with LVMH will close relatively soon as it continues to clear regulatory hurdles.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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