Tiffany & Co. (TIF) Reports Weak Holiday Sales, Revises Guidance
Shares of Tiffany & Co. (TIF) were trading down -1.65 or -2.44 percent to $66.00 per share in Tuesday’s premarket after the company reported its sales results for the two-month holiday season ending on December 31st. Tiffany & Co. stock closed at $67.65 per share, up +0.79 or +1.18 percent in Friday’s regular trading session.
Founded in 1837, New York City based Tiffany & Co. is a U.S. multinational jeweler and luxury retailer.
Tiffany & Co. reported early this morning that its holiday season sales had fallen six percent for the two month period ending at year’s end. The company said that the main factors contributing to the weak sales were the strong U.S. Dollar and the reluctance of foreign tourists to the United States spending in their stores.
On a constant exchange rate basis, which excludes the effect of currency translation into U.S. Dollars, Tiffany & Co. reported a decline of three percent to worldwide net sales. The drop was attributed to lower sales in the America’s and Asia Pacific that was offset by better numbers from Europe and Japan.
Comparable store sales for stores open at least one year were off five percent with no noteworthy changes in the performance of jewelry categories. The company reported worldwide net sales for the two months of $961 million, a six percent decline from the same period one year ago.
Tiffany’s Chief Executive Officer, Frederic Cumenal said in the company’s press release that, “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.”
Tiffany’s & Co. also cut its guidance for the full year, which it had previously forecast to decline -5 to -10 percent, is now expected to show a decline of -10 percent from the previous year’s $4.20 per diluted share. In addition to a debt extinguishment charge in 2014 and a loan impairment charge in the second quarter of 2015, the company said it would record a charge of approximately four cents per diluted share for “staff and occupancy” reductions, suggesting the company would be laying off workers and possibly closing stores.
Tiffany’s is scheduled to report its fourth quarter and full year results on March 18th before the market open. The earnings release will be followed by a conference call and question and answer session with management
Tiffany’s stock is trading just above its yearly low of $65.09 per share. This morning’s news has already made the stock test that level in the premarket. Given the company’s sales and the overall market weakness, the stock could extend its losses significantly.
Other News About TIF
This New Tiffany Ad Campaign Is Also a Salvo in a Legal Battle
Company’s new ad campaign focuses on the craftsmanship involved in making its engagement rings.
Why Tiffany & Co. Stock Sank 29% Lower in 2015
A weaker outlook for the company and the strong dollar were a large part of the reasons for the decline.
Other Stocks in the News
Twitter service goes down across world
Service suffers a worldwide outage this morning with European access the hardest hit.
Morgan Stanley posts quarterly profit as costs plunge
Company reports a profit for the quarter versus a loss last year as legal costs and compensation expenses drop.