The company sold at least 2,500 rings that it labeled as “Tiffany” rings, when in reality they were counterfeit items. These rings mimicked the appearance and style of the jewelry retailer’s rings, but they were not of the same quality.
A federal jury is overlooking the case, which will put Costco on the hook for punitive damages as well. Lawyers from both parties are gathering and presenting evidence to determine how much money the large-scale retailer owes.
Costco argued at the beginning of the trial — which began on Sep. 20 — that it didn’t owe more than $781,000, but this figure has gone up to a potential $5.5 million since then. Additionally, the jury rejected the retailer’s claim that “Tiffany” rings refers to a generic type of ring rather than rings directly associated with Tiffany’s.
The retailer said it would not comment on the situation as the jury is still deliberating the matter. U.S. District Judge Laura Taylor Swain noted that Costco employees were aware of its customers’ confusion and the company did nothing to clarify the matter.
The company reported poor sales for the month of July ahead of its fiscal fourth-quarter report, which was issued earlier today. Earnings were slated to come in at $1.73 per share, which came in below the $1.77 per share that Costco earned.
Additionally, net sales totaled $35.7 billion over the three-month period, missing revenue estimates by $1 billion.
COST stock is up 4.2% Friday. TIF stock is up 1.9%.