Tiffany & Co reported its biggest drop in quarterly sales since the peak of the global financial crisis as a strong dollar discouraged tourists from buying its high-end jewelry and eroded revenue from markets outside the United States. The company’s shares fell as much as 3 percent in morning trading on Wednesday.
In the Americas region, Tiffany’s sales at stores open more than a year plunged 10 percent in the first quarter. Analysts on average had expected a 9.1 percent decline, according to research firm Consensus Metrix.
Tiffany, which opened its first store on Sept. 14, 1837 in New York and earned a total of $4.98 on the first day, got nearly half of its $4.10 billion sales last year from the Americas region.
Chief Executive Frederic Cumenal said the company also faced pressure from lower foreign tourist spending in Europe and Asia, particularly in Hong Kong.
“We continue to assume that results in Hong Kong will be pressured throughout the year,” said Mark Aaron, vice president of investor relations.
Tiffany, whose one-of-a-kind pieces are a regular feature on Hollywood red carpets, has said that it is being hurt by a decline in Chinese tourists to Hong Kong, an important market.
Same-store sales in the Asia Pacific region, its second biggest market, slumped 15 percent.
Japan was the only bright spot in the quarter, with same-store sales rising 12 percent, partly due to the “dramatic strengthening of the yen” against the dollar.
Tiffany forecast a mid-single digit percentage fall in its full-year profit. The company had earlier said it expected earnings to stay flat or fall by up to mid-single digit in percentage terms.
Net income declined 16.6 percent to $87.5 million, or 69 cents per share, in the quarter ended April 30. Tiffany expects current-quarter profit to also “decline by a similar rate”.
Net sales dropped 7.4 percent to $891.3 million – the biggest fall since mid-2009 – missing the average analyst estimate of $915.1 million, according to Thomson Reuters I/B/E/S.
Tiffany’s shares were down 1.4 percent at $63.96. Up to Tuesday’s close, the stock had lost more than a quarter of its value in the past 12 months.