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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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