Tiffany not so sparkling in fourth quarter
A strengthening dollar hurt Tiffany & Co. a lot more than Wall Street was expecting in the fourth quarter, as the upscale jeweler reported a surprising sales decline.
Tiffany's worldwide net sales of $1.28 billion were down 1% from $1.3 billion, with the stronger U.S. dollar negatively impacting foreign sales results. Analysts were expecting it to rise to $1.31 billion.Same-store sales dropped 4%. However,Tiffany reported net earnings of $196 million, compared to a net loss of $104 million the same period a year earlier.
New York-based Tiffany in January had warned the stronger dollar would not only reduced the value of sales outside the United States, but also hurt sales to tourists in the country.
“2014 was a successful year for our company with meaningful progress made by our global team,” said Michael J. Kowalski, chairman and CEO. “We expanded our store base, introduced compelling new jewelry designs and strengthened customer awareness. And we achieved very healthy growth in net sales and earnings for the year.”
During fiscal 2015, Tiffany plans to open a net of 12-15 new company-operated stores across most regions. The majority of the new stores are expected to open in Asia-Pacific and the balance in the Americas and Europe. The company also plans to introduce new jewelry and watch designs, and invest in new systems.
For the full fiscal year, net earnings almost tripled to $484 million from $181 million the prior fiscal year. A reduction in pretax charges helped boost profit. Worldwide net sales rose 5% to $4.25 billion, and worldwide same-store sales increased 7%.
In fiscal 2015, Tiffany expects to report a low-single-digit percentage increase in worldwide net sales for the full year when reported in U.S. dollars. Worldwide net sales in the first quarter are expected to decline by approximately 10%, as reported in U.S. dollars. Worldwide net sales are expected to increase by a low-single-digit percentage, as reported in U.S. dollars, in the second quarter.