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Upscale jeweller Tiffany expects profit to drop in H1 2016
[BENGALURU] Upscale jeweller Tiffany & Co said it expected profit to fall in the first half of 2016 as a strong dollar hurts tourist spending at its stores in the United States and erodes revenue from other markets.
Weakness in the global economy and a strong dollar have reduced tourist spending on luxury items in the United States.
Tiffany's reluctance to offer promotions also discouraged thrifty shoppers, especially during the holiday season.
The company said on Friday that it expected profit per share to fall by 15-20 per cent in the current quarter and by 5-10 per cent in the second quarter, based on the trends seen so far.
Sales at its established stores open for at least a year fell 10 per cent in the Americas in the fourth quarter. Analysts had expected a drop of 9.4 per cent, according to research firm Consensus Metrix.
The company's net income declined nearly 17 per cent to US$163.2 million, or US$1.28 per share, in the quarter ended Jan 31.
Excluding items, Tiffany earned US$1.46 per share, beating the average analyst estimate of US$1.40, according to Thomson Reuters.
Its net sales fell 5.6 per cent to US$1.21 billion, but were in line with the average estimate.