Tiffany continues to show no signs of bouncing back. Shares are down more than 9 percent year to date and 19.5 percent in the last 12 months. Poor earnings and sales growth are to blame for the large downturn in recent quarters. Tiffany has reported negative growth for five consecutive quarters and counting.
In the first quarter, Tiffany delivered a 7 percent decline in worldwide net sales with comparable store sales declining across many of its geographical regions. Weak spending by U.S. consumers and foreign tourists were to blame for lower retail sales, while frequent discounting put pressure on margins.
Substantial downward revisions in the past three months suggest second quarter results are heading in the same direction. Analysts at Estimize are looking for earnings per share of 74 cents, down 13 percent from a year earlier. Revenue for the period is expected to be down 5 percent at $933.28 million.
Tiffany should continue to see an adverse impact from currency headwinds and weak consumer spending. Efforts to expand its omnichannel capabilities have also come with mixed results. Competition from online retailers like eBay have made it difficult for Tiffany to generate sales while maintaining respectable margins.
New store expansion remains one of the lone bright spots. A large part of Tiffany brand is built on the in-store experience rather than the online business. This rings particularly true for tourists visiting the United States.