Tiffany Misses Earnings Forecast, Cuts Outlook
Tiffany lowered its fiscal-year sales and profit forecast for the third straight quarter on Thursday as it reported lower-than-expected revenue and earnings, hit by a drop in same-store sales in Asia and disappointing sales of silver jewelry.
After the earnings announcement, the company's shares fell more than 8 percent in pre-market trading. (Click here to get the latest quotes for Tiffany.) Tiffany now expects global net sales growth of between 5 percent and 6 percent, down one percentage point from its most recent forecast, for the year ending in January.
It projected a full-year profit of $3.20 to $3.40 per share, down from an earlier range of $3.55 to $3.70.
Global sales rose 3.8 percent to $852.7 million in the third quarter ended Oct. 31, while sales at stores open at least a year across the chain rose 1 percent. Analysts expected sales of $859.2 million, according to Thomson Reuters.
Net income fell to $63.2 million, or 49 cents per share, for the quarter, from $89.7 million, or 70 cents per share, a year earlier. The latest result was 14 cents below Wall Street projections.
In Asia, same-store sales fell 4 percent, excluding Japan and the impact of currency changes. Like many other Western luxury brands, Tiffany has pinned much of its growth projections on Asia, China in particular.
Chief Executive Michael Kowalski said the company had a "cautious" near-term view of the global economy, but expects results to start improving during the current holiday season, when Tiffany gets one-third of annual sales.
Sales of its silver jewelry were lower than expected. Tiffany gets about one-quarter of its sales from relatively inexpensive items, such as sterling silver key charm.
In the Americas, sales rose 3 percent, helped by improving business at its Fifth Avenue flagship, where sales were up 5 percent.