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Tiffany’s 2015 Sales -3% on Strong Dollar

Mar 20, 2016 10:11 AM   By Rapaport News
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RAPAPORT... Tiffany & Co. missed its own revenue forecast in 2015 as a strong dollar affected translation of non-U.S. sales into the greenback and hit foreign tourist spending in American markets. Macro-economic “challenges and uncertainties” also had a negative impact on sales, the jeweler said.

“We faced various challenges during the year that negatively affected our financial results, especially related to the strong U.S. dollar,” said Frederic Cumenal, Tiffany’s chief executive officer. The global sales growth on a constant exchange-rate or reported basis, “along with a lack of earnings growth, did not meet the forecasts we had communicated at the start of the year,” the CEO added.

On a reported basis, worldwide net sales slid 3 percent to $4.1 billion in 2015, below Tiffany’s guidance of a low-single-digit increase. On a constant exchange-rate basis, revenue rose 2 percent, given the strength in Asia-Pacific, Japan and Europe. Within Asia-Pacific, sales climbed in China and Australia, but Hong Kong showed “continued weakness,” according to a statement March 18.

The U.S. dollar appreciated in 2015 against the euro and emerging-market currencies mainly on account of the divergence in monetary policies between the U.S. and the rest of the world, with the Federal Reserve increasing interest rates for the first time in almost a decade.

Tiffany’s profit fell 4 percent to $463.9 million, and net earnings per diluted share (EPS) slipped from $3.73 to $3.59. Management expects that earnings per diluted share in the first quarter may decline by 15-20 percent, followed by a 5 to 10-percent decline in the second quarter and a resumption of growth in the second half.

Fourth-quarter sales fell 6 percent from a year ago to $1.21 billion, while profit in the period slid 17 percent to $163.2 million.
Tags: Rapaport News, retail, retail sales, Tiffany, Tiffany & CO., U.S. retail
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