Tiffany sales miss as Chinese tourists spend less than anticipated

Tiffany & Co’s sales in the United States and Hong Kong took a hit in the latest quarter as Chinese tourists spent less than expected, sending the jewelry maker’s shares down nearly 8 percent on Wednesday.

Investors were also disappointed by the company’s failure to raise its full-year profit outlook ahead of the holiday season.

Weakening economic growth in China, against the backdrop of an ongoing trade spat between Beijing and Washington, has been a worry for luxury goods companies that rely on the country to boost sales.

Louis Vuitton owner LVMH said in October it had experienced a slight slowdown in demand among its Chinese clientele, sparking a selloff in shares of luxury accessories retailers on both sides of the Atlantic.

Tiffany Chief Executive Officer Alessandro Bogliolo, however, said sales growth in mainland China remained strong.

The company’s comparable-store sales, excluding the impact of currency changes, rose 3 percent, while analysts on average were expecting a rise of 5.3 percent, according to IBES data from Refinitiv.

Tiffany forecast full-year profit between $4.65 and $4.80 per share. Analysts on average had estimated $4.83 per share.

The unchanged outlook also reflected Tiffany’s planned increases in marketing expenditure to entice younger shoppers into its stores and expenses related to the renovation of its flagship store in New York, the company said.

The company’s net income fell to $94.9 million, or 77 cents per share, in the third quarter ended Oct. 31, from $100.2 million, or 80 cents per share, a year earlier.

Total revenue rose 3.7 percent to $1.01 billion.

Analysts on average expected earnings of 77 cents per share on revenue of $1.05 billion.