Tiffany 1Q Profit Drops 17.1%, Revenue Misses, Offers Downbeat Forecast
Tiffany & Co. (NYSE: TIF) announced 17.1 percent drop in profit for the first quarter, hurt by the 7 percent fall in worldwide net sales dragged down by comparable store sales of 9 percent. As a result, its adjusted earnings and revenue fell short of the Street predictions. The company also provided downbeat guidance for the full year. Following this, the shares of the company tanked more than four percent in the pre-market trading.
The company reported net earnings of $87 million, down 17.1 percent from $105 million while earnings fell 14.8 percent to $0.69 per share from $0.81 a share in the year-ago quarter. The latest quarter results included a tax benefit of $0.05 per share related to the settlement of a tax examination. Excluding the gain, it would have earned only $0.64 a share, which meant that earnings missed by $0.04 shares from the Street analysts' estimations of $0.68 a share.
Tiffany said that worldwide net sales fell 7 percent to $891 million from $962.4 million in the previous year quarter. Street analysts predicted the company to generate $910.15 million. Its comparable store sales dropped 9 in the first quarter.
The company's CEO, Frederic Cumenal, said, "As expected, this was a difficult quarter in terms of both sales and earnings growth. We faced numerous challenges, including continued pressure from foreign tourist spending in Europe, the U.S. and Asia, particularly in Hong Kong. However, we are continuing to take actions that are intended to strengthen sales growth with local customers in the U.S. and around the world."
He continued, "From a strategic perspective, we believe that our initiatives will enhance our ability to provide our customers with extraordinary products and experiences and ultimately contribute to improved financial results. We remain focused on generating sustainable long-term sales and earnings growth."
Moving ahead, Tiffany said that it expects earnings to drop by a mid-single-digit percentage from last year's adjusted earnings per share. Similarly, it expects earnings to fall in the second quarter by the same rate with which it fell in the first quarter. Analysts expect the company to deliver 1.8 percent drop in EPS for the full year and 8.1 percent for the second quarter.
In the pre-market trading on Wednesday, the stock traded down 4.53 percent.
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