Tiffany & Co. Hits New 52-Week Low Following Lowered Guidance

Shares of Tiffany & Co. TIF lost more than 5 percent on Tuesday and hit a new 52-week low of $62.90 after the company reported its holiday sales metrics and issued an update to its earnings expectations.

Tiffany reported that its total sales for the two-month period ending December 31 were negatively affected by the strong U.S. dollar and weak tourist spending in several key markets. The company added that on a constant-exchange-rate basis, worldwide net sales fell 3 percent while comparable store sales fell 6 percent.

Tiffany added that in U.S. dollars, worldwide net sales during its holiday period fell 6 percent from the same period a year ago to $961 million.

By region, comparable store sales in the Americas fell 8 percent and was attributed to lower foreign tourist spending in New York and other markets. Comparable store sales fell 9 percent in the Asia-Pacific region as "strong" sales in China were more than offset by "significant weakness" in Hong Kong and Singapore.

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European comparable store sales fell 2 percent in Europe as sales rose in the United Kingdom but performance was mixed across other countries in the region.

On the other hand, comparable store sales rose 10 percent in Japan due to higher sales to local customers and foreign tourists.

Following Tiffany's holiday period, the company expects its net earnings for the fiscal year ending January 31, 2016 to fall 10 percent from last year's $4.20 per diluted share. The company previously foretasted its earnings to fall by 5 percent to 10 percent.

Finally, Tiffany's noted that the ongoing strength in the U.S. dollar along with global macro challenges will "likely result in minimal growth in net sales and near earnings."

Frederic Cumenal, chief executive officer, said, "In the holiday period, we continued to feel pressure from the strong U.S. dollar on the translation of non-U.S. sales into dollars and on foreign tourist spending in the U.S., which we expect will continue into 2016. We believe overall sales results were negatively affected by restrained consumer spending tied to challenging and uncertain global economic conditions and we expect 2015 earnings to come in at the low end of our previously-set range of expectations. Nonetheless, we were pleased with initial sales of our new fashion and fine jewelry designs, a solid increase in worldwide e-commerce sales and our ability to maintain gross margin at normal levels."