Jeweler Tiffany posts steepest sales drop since financial crisis

Wed May 25, 2016 11:00am EDT
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By Subrat Patnaik

(Reuters) - Tiffany & Co (TIF.N: Quote) reported its biggest drop in quarterly sales since the peak of the global financial crisis as a strong dollar discouraged tourists from buying its high-end jewelry and eroded revenue from markets outside the United States.

The company's shares fell as much as 3 percent in morning trading on Wednesday.

In the Americas region, Tiffany's sales at stores open more than a year plunged 10 percent in the first quarter. Analysts on average had expected a 9.1 percent decline, according to research firm Consensus Metrix.

"Decline in customer share is evident among most shopper segments, including more affluent households," research firm Conlumino's Chief Executive Neil Saunders said.

"It is especially pronounced among affluent younger shoppers where the brand is seen as representing 'old world luxury'."

Tiffany, which opened its first store on Sept. 14, 1837 in New York and earned a total of $4.98 on the first day, got nearly half of its $4.10 billion sales last year from the Americas region.

Chief Executive Frederic Cumenal said the company also faced pressure from lower foreign tourist spending in Europe and Asia, particularly in Hong Kong.

"We continue to assume that results in Hong Kong will be pressured throughout the year," said Mark Aaron, vice president of investor relations.   Continued...

The Tiffany & Co. logo is seen on an awning of their store in Manhasset, New York, U.S., May 23, 2016.  REUTERS/Shannon Stapleton