(Reuters) - Upscale jeweler Tiffany & Co (TIF.N) cut its profit forecast for the full year, citing a disappointing holiday shopping season and further weakness in Japan.
Tiffany shares fell as much as 14.4 percent to $88.52 on Monday, their biggest intra-day decline in nearly 11 years.
The company said it now expected an adjusted profit of $4.15-$4.20 per share in the year ending Jan. 31, down from its prior forecast of $4.20-$4.30.
Analysts on average were expecting full-year earnings of $4.31 per share, according to Thomson Reuters I/B/E/S.
“The Americas segment appears to have run out of steam,” Canaccord Genuity Inc analyst Laura Champine wrote in a note.
Both overall and same-store sales in the Americas, the company’s biggest market, fell 1 percent in the two-month holiday shopping period ended Dec. 31, Tiffany said.
Sales in that segment had risen 6 percent in the same period last year.
Tiffany President Frederic Cumenal said the stronger dollar not only affected the translation of results, it also had an impact on sales from tourists in the United States.
Sales to tourists makes up for the bulk of revenue at the company’s flagship Fifth Avenue store in Manhattan. The store contributes nearly 8 percent to total sales.
Sales in Japan, which contributed 12 percent to total sales in the third quarter, fell 16 percent in the November-December period.
Tiffany’s sales in Japan have fallen for the past two quarters after the government raised consumption tax to 8 percent from 5 percent, prompting shoppers to cut back on spending.
The company said it expected the strong dollar to continue to weigh on results in 2015, resulting in low-to-mid single-digit percentage growth in sales and profit.
The global high-end consumer may be entering a period of a sustained slowdown, Keybanc Capital Markets analyst Edward Yruma wrote in a note last week and downgraded Tiffany’s stock to “hold” from “buy”.
Macro-economic challenges and geo-political concerns will curtail high-end spending in 2015 and hurt international tourism to the United States, Yruma wrote.
The dollar .DXY gained nearly 13 percent against a basket of major currencies in 2014, its strongest performance since 1997. The U.S. currency is widely expected to strengthen further this year.
Tiffany’s shares were down 14 percent at $88.83 in afternoon trading on the New York Stock Exchange. Up to Friday’s close the stock had risen 14 percent in 2014.
Reporting by Nayan Das and Ramkumar Iyer in Bengaluru; Editing by Joyjeet Das