By Suzanne Kapner and Michael Calia
Silver and gold didn't shine for Tiffany & Co. this
Christmas.
The high-end jeweler said its sales over the holiday were
disappointing and warned the stronger dollar would weigh on its
profit for the year, sending its shares on a steep 14% drop
Monday.
A stronger U.S. dollar meant overseas sales didn't have as much
bang for the buck and damped purchases by tourists in the U.S., an
important source of business for Tiffany.
The jeweler lowered its profit forecast for the year ending Jan.
31 and said the currency issues will strain its results in its next
fiscal year as well. The company will likely plan for profit and
sales growth in the low- to mid-single-digit percentages for the
coming year. Analysts polled by Thomson Reuters were projecting 14%
earnings growth and a 7% rise in revenue.
Tiffany's results contrast with Signet, which operates the
lower-end Zale and Kay Jewelers brands in the U.S., as well as the
Ernest Jones brand in the U.K. Signet said last week that holiday
sales at established stores rose 3. 6% and reaffirmed its earnings
guidance for the fourth quarter.
For the two months ended Dec. 31, Tiffany posted a world-wide
sales decline of 1%. Stripping out currency moves, sales grew 3%.
Sales fell 16% in Japan, the company's weakest-performing
market.
The jeweler's shares have risen sharply over the past two years
and had traded as high as $109 in December.
The downbeat news from Tiffany contrasted with results from
other retailers that have generally reported stronger-than-expected
holiday results, lifted by lower gas prices, falling unemployment
and an improving economy. Express Inc. and Lululemon Athletica Inc.
boosted their outlooks Monday, following a number of positive news
from retailers last week.
Express said its full year profit will be higher than expected,
as sales fall less than expected. The apparel chain, whose shares
rose more than 3% Monday, had warned in early December of
challenges during the rest of the holiday season, but things turned
around near the end of the year.
Yogawear company Lululemon, meanwhile, said it is entering the
new year in "very good shape" thanks to improving trends and strong
results during the holidays. The company raised its profit
forecast, and its shares gained 6.8%.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com and Michael
Calia at michael.calia@wsj.com
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