Tiffany full year profit to drop further
Tiffany & Co reported a surprise drop in quarterly sales and forecast a bigger fall in full-year profit than it had expected earlier as a strong dollar hurt tourist spending in the United States and reduced the value of sales from other markets.
Tiffany’s worldwide comparable sales fell 5 percent in the third quarter. Analysts had expected a much smaller decline of 0.8 percent, according to research firm Consensus Metrix.
The dollar rose about 12.5 percent against a basket of major currencies in the year ended Oct. 31, hurting companies that have big exposure to markets outside the United States.
Tiffany has been revamping its fine jewelry lines and expanding its silver jewelry offerings to attract shoppers, who are cutting back on discretionary purchases and spending more on electronics, cars and home goods.
The company’s comparable sales rose 1 percent on a constant-currency basis, but the growth was much slower than the 3.3 percent analysts had expected.
“Volatile, uncertain economic and market conditions in the U.S. and other regions are affecting consumer spending, causing us to maintain a cautious near-term outlook,” Chief Executive Frederic Cumenal said in a statement.
Tiffany said it now expected earnings to fall by 5-10 percent in the year ending Jan. 31. The company had earlier forecast a 2-5 percent decline.
Its net income more than doubled to $91 million, or 70 cents per share, in the quarter ended Oct. 31, reflecting a loss related to debt extinguishment in the year-earlier period.