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Tiffany’s Holiday Sales -6% on Strong Dollar, Lower Tourist Spending

Jan 19, 2016 8:34 AM   By Rapaport News
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RAPAPORT... Tiffany & Co. reported global sales in the two months to December 31 dropped 6 percent year on year to $961 million as a stronger U.S. dollar coupled with weaker tourist spending hit revenue. The jeweler cut its guidance for full-year net earnings.

Even at constant exchange rate, worldwide sales fell 3 percent during the 2015 holiday season as declines in the Americas and Asia Pacific offset growth in Japan and Europe. Comparable-store sales worldwide slid 5 percent ex-currency, according to a statement January 19.

In the U.S., lower foreign-tourist spending in New York and certain other markets in the country exacerbated the sales drop. Total sales slumped 7 percent year on year to $505 million. Ex-currency, the dip was 5 percent and comparable-store sales fell 8 percent.

“Significant weakness” in Hong Kong and Singapore weighed down Asia-Pacific sales, while revenue from Japan rose 9 percent on higher sales to locals and foreign tourists, the statement said. European sales were mixed, with France seeing a “notable” decline.

"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,” said Frederic Cumenal, Tiffany’s chief executive officer.

“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.”

Worldwide ecommerce sales enjoyed a “solid” increase, Cumenal added.

The jeweler cut its guidance for full-year net earnings for the year to January 31, 2016, forecasting a decline of about 10 percent from last year’s $4.20 per diluted share, compared with an earlier guidance of a 5- to 10-percent drop. The “strong U.S. dollar and global macro challenges will likely result in minimal growth in net sales and net earnings” in 2016 as reported in dollar terms, the company said.

The forecast excludes a charge of approximately four cents per diluted share recorded in the fourth quarter for "staff and occupancy reductions," the statement said. The job cuts are "not as large as what we'd done at the end of 2008," Reuters cited Mark Aaron, Tiffany's vice president of investor relations, as saying.
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Tags: holiday sales, holiday season, Rapaport News, retail, retail sales, Tiffany, Tiffany & CO., u.s.
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