Tiffany Misses Q2 Estimates, Shares Tumble

Shares of

dropped more than 6 percent in pre-market trading after the company reported weaker-than-expected results for the second quarter and issued a weak forecast. The New York-based company reported quarterly net earnings of $104.9 million, or $0.81 per share, compared to $124.1 million, or $0.96 per share, in the year-ago period. Excluding non-recurring items, the company's earnings slipped 10 percent to $0.86 per share. Worldwide net sales slipped to $990.5 million from $992.9 million. However, analysts were expecting earnings of $0.91 per share on revenue of $1.00 billion. The average estimate among 34 Estimize users was for earnings of $0.90 per share and revenue of $1.0 billion. Same-store sales in the Americas came in flat for the quarter, while same-store sales gained 6 percent in the Asia-Pacific region. Comparable store sales in Japan climbed 21 percent in the latest quarter, while comparable store sales rose 19 percent in Europe. Gross margin came in flat at 59.9 percent in the second quarter. At July 31, 2015, the company had $771 million in cash and cash equivalents and short-term investments, versus $398 million, a year earlier. At July 31, 2015, net inventories shrank 7 percent to $2.4 billion. Frederic Cumenal, chief executive officer, said, "We entered this year expecting translation and tourism-related pressures on sales and earnings from the exceptionally strong U.S. dollar, as well as challenging economic conditions in certain markets. While the adverse effects from the strong dollar have been even more significant than initially expected, we met our overall expectations in the first half of the year." For the full year, the company now projects EPS to drop 2 percent to 5 percent versus last year's $4.20 per share. Analysts expected earnings of $4.26 per share. Tiffany shares fell 6.68 percent to $79.40 in pre-market trading.