Luxury jeweler, Tiffany & Co released a quarterly update to investors in which it saw its largest fall in quarterly sales since the global financial crisis with the stronger dollar putting off tourists from indulging in its specialty products cutting its revenue from markets outside of the U.S.
Shares in Tiffany & Co dropped by as much as 3% in early Wednesday’s trading session.
Inside the Americas division the group saw sales drop by 10% during the first quarter, more than the 9.1% expected by analysts according to research company Consensus Metrix.
“Decline in customer share is evident among most shopper segments, including more affluent households,” research firm Conlumino’s Chief Executive Neil Saunders said.
“It is especially pronounced among affluent younger shoppers where the brand is seen as representing ‘old world luxury’.”
CEO, Frederic Cumenal said foreign tourists across Europe, Asia and especially Hong Kong made less purchases.
Ark Aaron, vice president of investor relations said:
“We continue to assume that results in Hong Kong will be pressured throughout the year.”
Tiffany, which specialises in unique high end jewelry said it believes less Chinese tourists travelling to Hong Kong affected earnings as it is a key market to the company. Like for like sales in the Asia Pacific region saw a slump of 15%.
Japan was the only location to see an improvement during the quarter as same-store sales increased by 12% which was indicated as being partly due to the “dramatic strengthening of the yen” compared to the dollar.
Looking forward the business said it anticipates mid-single digit percentage falls in full-year profit compared to previous expectations of a flat to mid-signle digit percentage falls at the lower end.
Net income during the quarter ending April 30 at the specialty retailer dropped by 16.6% to $87.5 million, or 69 cents per share. Tiffany said the current quarter outlook is similar.
Net sales fell by 7.4% to $891.3 million, the most since 2009 during the financial crisis whilst analysts had pencilled in estimates of $915.1 million, according to Thomson Reuters.
Tiffany’s shares dropped by 2% to $62 in early Wednesday morning trade adding to a 26% loss in the share price over the last 12 months.