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RAPAPORT... Tiffany & Co. reported that revenue fell 1 percent year on year to $1.02 billion for two-month Christmas season that ended on December 31. Comparable-store sales were flat.
Michael J. Kowalski, the chairman and CEO, said, said, “Clearly, sales for the holiday period were disappointing overall, with significant variability in performance by region and by product category. In terms of regional performance, Asia-Pacific showed solid sales growth, sales in Japan continued to be weak, European sales rose nicely in local currencies and sales in the Americas declined slightly after a very strong start to the year. Regarding product categories, our very strong and concentrated marketing focus on Tiffany 'T' generated strong sales growth in fashion gold jewelry. However, that success did not translate into broader sales momentum as we had anticipated in other jewelry categories.” Sales in the Americas region fell 1 percent, while same-store sales also dropped 1 percent. In the Asia-Pacific region on a constant-exchange-rate basis, revenue increased 10 percent and comparable-store sales rose 6 percent. In Japan, on a constant-exchange-rate basis, sales declined 3 percent, while same-store sales dropped 8 percent. Sales across Europe, on a constant-exchange-rate basis, increased 9 percent and comparable-store sales rose 4 percent. For the retailer's fiscal year that ends on January 31, Tiffany & Co. anticipates net earnings in the range of $4.15 to $4.20 per diluted share, excluding a loss of 47 cents per diluted share after-tax on the extinguishment of long-term debt, down from its previous forecast of $4.20 to $4.30 per diluted share. Still, the forecast represents a year-on-year increase of as much as 13 percent. Frederic Cumenal, Tiffany & Co.'s president, said, “Tiffany has meaningful global opportunities to pursue over the long-term. For the coming year, however, we are planning cautiously as we anticipate significant headwinds from the stronger U.S. dollar against all of our key currencies that, as we experienced in the Christmas period, negatively affects both the translation of results and sales to tourists in the U.S. While we are still in our planning process, we believe these factors will likely result in our planning low- to mid-single-digit sales and earnings growth in 2015. Despite these and other global economic pressures that we anticipate in the short-term, we believe that, when they abate, Tiffany will resume higher earnings growth rates based on stronger sales growth and increasing operating margins. We will provide an update when we report Tiffany’s full year results in March.”
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