Tiffany’s share price falls as it reports poor Christmas sales thanks to a strong dollar and weak tourist spending
Jeweller Tiffany & Co saw its share price tank today, after reporting sales struggled over the Christmas period. Tiffany shares were trading down by around five per cent by late morning in New York.
The figures
Revenue in the two month holiday period over November and December fell six per cent to to $961m (£679m).
On a constant exchange-rate basis, eliminating the effect of the strong dollar, sales still fell, by three per cent.
Comparative store sales were down 14 per cent in China, and in America and Europe fell by 10 per cent.
Net sales in the US were down by seven per cent to $505m.
The company did not update profit figures.
Looking ahead, Tiffany expects full-year profit for 2015 to decline by 10 per cent, at the lowest end of its projected five to 10 per cent fall. It expects minimal growth in 2016.
Why it's interesting
Tiffany blamed market volatility for depressing consumer spending: "We believe overall sales results were negatively affected by restrained consumer spending tied to challenging and uncertain global economic conditions."
Many luxury brands have struggled recently, and Richemont, the owner of rival brand Cartier, also reported problems in the Hong Kong market, which offset any gains in China.
"A continuation of strong sales growth in China was more than offset by significant weakness in Hong Kong and Singapore," Tiffany said in a statement.
Tiffany shares have fallen more than 27 per cent over the past year.
What Tiffany said
Frederic Cumenal, chief executive of Tiffany & Co, said:
"In the holiday period, we continued to feel pressure from the strong US dollar on the translation of non-US sales into dollars and on foreign tourist spending in the US, which we expect will continue into 2016. 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, a solid increase in worldwide e-commerce sales and our ability to maintain gross margin at normal levels.”
In short
All that glistens is not so good for Tiffany's sales.