Lackluster holiday sales prompt Tiffany to cut outlook, staff

Tiffany & Co. says weak tourist spending and a strong dollar hurt its sales results for the two-month holiday period.



The retailer said worldwide net sales declined 3% (due to declines in the Americas and Asia-Pacific offsetting growth in Japan and Europe) and same store sales declined 5%. There were no noteworthy differences in performance among jewelry categories, the company said. Reported in U.S. dollars, worldwide net sales of $961 million were 6% lower than the prior year.



Frederic Cumenal, CEO, said: “In the holiday period, we continued to feel pressure from the strong U.S. dollar on the translation of non-U.S. sales into dollars and on foreign tourist spending in the U.S., which we expect will continue into 2016. We believe overall sales results were negatively affected by restrained consumer spending tied to challenging and uncertain global economic conditions and we expect 2015 earnings to come in at the low end of our previously-set range of expectations. Nonetheless, we were pleased with initial sales of our new fashion and fine jewelry designs, a solid increase in worldwide e-commerce sales and our ability to maintain gross margin at normal levels.”



Same-store sales, on a constant-currency basis, fell 8% in the Americas, 9% in the Asia-Pacific region and 2% in Europe, while increasing 10% in Japan. The retailer said it expects earnings per share for the fiscal year ending Jan. 31 to decline 10% from EPS of $4.20 a year ago. The updated outlook excludes a charge of roughly 4 cents a share that Tiffany is booking in the fourth quarter for “staff and occupancy reductions.”



As of Dec. 31, the company operated 307 stores (125 in the Americas, 81 in Asia-Pacific, 56 in Japan, 39 in Europe, and five stores in the United Arab Emirates and one in Russia), versus 296 stores a year ago (123 in the Americas, 73 in Asia-Pacific, 56 in Japan, 38 in Europe, and five in the U.A.E. and one in Russia).