Tiffany Cuts Guidance, Staff on Soft Holiday Sales
January 19 2016 - 7:50AM
Dow Jones News
Tiffany & Co. said Tuesday that sales during the holiday
period softened, prompting the luxury jeweler to reduce staff and
cut its outlook for the year.
The New York company said "challenging and uncertain global
economic conditions" have resulted in restrained consumer spending,
and a stronger U.S. dollar continues to dent foreign tourist
spending. For the crucial holiday shopping season, Tiffany reported
a 3% currency-adjusted drop in world-wide sales and a 5% decline in
sales at stores open at least a year.
Following the disappointing period, Tiffany reduced its forecast
for its fiscal year ending Jan. 31. Adjusted earnings will decline
about 10%, Tiffany said, guidance that translates to $3.78 a share.
Analysts have projected $3.88 in adjusted per-share earnings this
year.
The updated outlook excludes a charge of roughly 4 cents a share
that Tiffany is booking in the fourth quarter for "staff and
occupancy reductions." A spokesman declined to comment on the
number of people Tiffany is laying off. He said the occupancy
portion of the charge stems from space in the company's corporate
offices and isn't related to store closings.
The jeweler isn't alone in reporting disappointing holiday
sales. Larger retailer Macy's Inc. warned that sales at existing
stores fell 4.7% in November and December and said it would cut
thousands of jobs as it closes stores, and Gap Inc., which is also
shutting shops, said December sales for existing stores fell 5%
from a year earlier. On Friday, the government reported a 0.1%
decline in December U.S. retail sales, closing out the weakest year
for sales growth since the end of the recession in 2009.
Tiffany was one of many retailers that warned in November that
holiday sales would disappoint. The company's struggle with adverse
currency rates has been ongoing, as nearly a quarter of Tiffany's
U.S. sales and roughly 40% of sales at its flagship Fifth Avenue
store in Manhattan come from foreign tourists.
Shares in the company, down 15% over the past three months, slid
2.5% in light premarket trading.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
January 19, 2016 08:35 ET (13:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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