US luxury jeweler Tiffany & Co (TIF) cut its yearly profit forecast on Jan. 18 on weaker holiday sales, after spending by Chinese tourists fell unexpectedly on a global level. Tiffany also saw lowering Europe demand.
During the last two months of 2018, worldwide same-store sales fell 2% while net sales slipped 1% — the estimation was that they would increase modestly.
Tiffany Chief Executive Alessandro Bogliolo in a statement said that lower spending by tourists, mostly Chinese, and uncertainties in Europe have adversely affected customer demand.
Alessandro Bogliolo’s statement read, “overall holiday sales results came in short of our expectations.”
In the first part of Friday, Tiffany stock slipped 1% on the news. Till Thursday close, the jeweler saw its stock fall 22% in the past twelve months.
Tiffany also refrained from raising its yearly profit targets in November, possibly due to the same slowdown in spending.
Tiffany is not the only one hit by this latest trend. Underwhelming holiday period results also affected Macy’s (M), Kohls (KSS) and other major US retailers.
On Thursday, another US jeweler Signet (SIG) posted sliding holiday period sales and cut its 2018 profit forecast. Its stock plummeted 20%.
REVISITING THE LAST QUARTER
Back in the last week of November 2018, Tiffany & Co posted a 4% rise in worldwide net sales of $1.01 billion, helped by a 2% improvement in comparable sales for the third quarter. However, the top line then narrowly missed market estimates.
Net earnings for the period fell 5% to $95 million or $0.77 per diluted share. In the Americas, total net sales inched 5% up to $442 million, while Asia-Pacific net sales rose 4% to $294 million.
At October 31, 2018, Tiffany operated 321 stores — 124 in the Americas, 89 in Asia-Pacific, 55 in Japan, 48 in Europe, and five in the UAE — vs. 315 stores a year ago.
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