Those wealthy folk that are heavily invested in stocks haven’t let the fall swoon in prices deter their spending habits.
Or so says high-end jeweler Tiffany & Co (TIF).
“As far as the general market, stock market is doing, this is something we look closely because this can be an effect on the perceived wealth of people. So far, we have not seen a direct impact of it on sales because our sales to local customers around the world has kept being positive, very positive also in the third quarter. But of course it’s something that we look closely because we know that it may have an effect on luxury consumption,” Tiffany & Co. CEO Alessandro Bogliolo told analysts on a conference call Wednesday.
He later added on the call, “It’s true that two quarters, six months ago, nobody was talking about technology share prices being weak, and this is something that has happened more recently, so I’m not able to tell you about the future. But as far as the year-to-date and the third quarter, we have seen no slowdown in demand from local customers in USA.”
Tiffany & Co. shares were punished 12% on Wednesday as sales were held back by weak demand among Chinese tourists to U.S. stores. But to Bogliolo’s point, customers that live near Tiffany & Co. stores appeared to continue to shop freely for pricey jewelry despite the free-fall in the Dow Jones Industrial Average and once hot tech stocks like Apple.
Execs said same-store sales to local customers in the Americas, Japan and Asia Pacific regions all increased in the third quarter.
U.S. household net worth surged $2.2 billion in the second quarter amid a push higher in the stock market, according to the latest data available from the Federal Reserve. Wealth among U.S. households stood at a staggering $106.9 million trillion.
What’s unclear is if Bogliolio’s observations are more backward looking. With stocks continuing to be off their record highs of the year, it’s possible high-end shoppers spend more cautiously in the early stages of 2019.
Bring on that holiday quarter update from Tiffany & Co. in January.
Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter @BrianSozzi
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