Tiffany Sales Decline More Than Expected
May 25 2016 - 8:40AM
Dow Jones News
Tiffany & Co. said its sales fell more than Wall Street had
anticipated in the latest quarter, again hurt by reduced spending
by tourists, and warned that earnings for the current period would
be worse than it had previously feared.
Tiffany's stock, which has slid 11% this month and is down 27%
from a year ago through Tuesday's close, was down 4.5% in premarket
trading.
The luxury jeweler now expects full-year earnings to decline by
a mid-single-digit percentage on a per-share basis, the low end of
its prior estimate. It had previously guided for per-share profit
to be unchanged from 2015 or down by a mid-single-digit
percentage.
The company also now expects a decline in second-quarter
earnings similar to the 15% drop in the first quarter. Tiffany had
previously forecast earnings to be down 5% to 10% in the second
quarter.
Chief Executive Frederic Cumenal, calling it a "difficult
quarter," said the company faced numerous challenges in the latest
period, including continued pressure from soft foreign tourist
spending in the U.S., Europe and Asia, particularly in Hong
Kong.
Sales at existing stores fell 9%. Analysts had projected a 6.8%
decline, according to Consensus Metrix.
Still, Tiffany said its gross profit margin expanded to 61.2% in
the quarter from 59.1% as it sold more profitable products, helped
by price increases and lower costs.
Over all, Tiffany earned $87.5 million, or 69 cents a share,
compared with $104.9 million, or 81 cents a share, in the
year-earlier period.
Revenue slipped 7.4% to $891.3 million. Analysts polled by
Thomson Reuters had expected 68 cents a share on $915 million in
revenue.
Tiffany opened two company-operated stores in the first quarter
and closed one location ending the quarter with 308 stores,
compared with 298 a year ago.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
May 25, 2016 08:25 ET (12:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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