TIF Tiffany and Co

Tiffany & Co. said profit slid 15% in its latest quarter, as the luxury brand continues to struggle with a stronger dollar's effect on sales.

The retailer also sharply cut its full-year outlook, sending shares 7.2% lower premarket. Through Wednesday's close, shares had lost about 21% this year.

"We entered this year expecting translation and tourism-related pressures on sales and earnings from the exceptionally strong U.S. dollar, as well as challenging economic conditions in certain markets," said Chief Executive Frederic Cumenal, noting that the currency impact has been "even more significant" than anticipated.

While a stronger dollar has pinched many companies—it makes products more expensive abroad and diminishes repatriated revenue—Tiffany's domestic results also suffer from the dollar's strength. Nearly one-quarter of all U.S. sales and more than 40% in Tiffany's flagship Fifth Avenue store in Manhattan are made to foreign tourists pricing accessories in their own currencies.

Overall revenue was little changed from a year earlier. A 33% drop in comparable sales in the company's "other" segment—consisting of mostly emerging markets—offset a 5% rise in Japan, a 4% increase in the rest of Asia, and a 2% gain in Europe. In the Americas, sales fell 2% from last year's period. Comparable sales measure sales at stores open at least a year.

Adjusting for foreign-exchange moves, same-store sales from the category including emerging markets fell 12% and sales in Europe jumped 20%. The strong dollar helped the Japanese business, which has been under pressure amid weak economic conditions, as sales were flat there on an adjusted basis. Growth in Canada and Latin America helped boost adjusted-Americas sales 4%.

In all, the company reported a profit of $104.9 million, or 81 cents a share, down from $124.1 million, or 96 cents, a year earlier.

Excluding an impairment charge stemming from a loan to a diamond-mining company, among other items, per-share profit fell to 86 cents. The company repurchased $23 million in shares during the quarter.

Revenue slipped to $990.5 million from $992.93.

Analysts anticipated 91 cents in earnings per share on $1 billion in revenue, according to Thomson Reuters.

The company said it now predicts earnings this year to fall 2% to 5% from last year. The guidance translates to per-share earnings of $3.99 to $3.36—far short of the $4.26 analysts have anticipated. Previously, Tiffany projected "minimal" earnings per share growth versus 2014.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

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(END) Dow Jones Newswires

August 27, 2015 08:25 ET (12:25 GMT)

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