Tiffany & Co's Q1 Earnings Tarnish Its Sterling Reputation

After beating Wall Street analysts' expectations for three out of the previous four quarters, Tiffany & Co TIF released earnings this morning that missed the mark.

The jeweler and retailer released adjusted first quarter earnings of $0.64 per share, while analysts were expecting $0.69 per share. However, sales of $819 million did slightly outshine analyst expectations of approximately $817.5 million.

"In terms of our sales for the first quarter, regions outside the Americas performed generally as expected. However, the Americas region underperformed, continuing a soft trend that began in the last quarter of 2011 and compounded by the difficult comparison to substantial sales growth in last year's first quarter," explains Michael J. Kowalski, Tiffany & Co's chairman and chief executive officer in a press release.

"These sales results led to net earnings modestly trailing our expectations," he continues.

On top of disappointing earnings for the first quarter, Tiffany & Co's management reduced sales and earnings projections for the company's full fiscal year.

"We are updating our forecast for the full year to reflect these first quarter results and to reflect lower near-term expectations," says Kowalski.

Management now expects full year sales growth of 7-8% compared to the previous forecast of 10%. In addition, management anticipates full year net earnings per diluted share in a range of $3.70 - $3.80, a $0.20 decrease from the previous forecast of $3.95 - $4.05.

Kowalski adds, "Although we are very early into the second quarter, worldwide sales are currently increasing by a low-single-digit percentage, reflecting difficult year-over-year comparisons and decelerating rates of economic growth in many countries.”

Following this morning's earnings release, shares of Tiffany & Co declined by as much as 9%.

Disclosure: At the time of this writing, I did not own shares of any companies mentioned in this post.