Jewelry store operator Tiffany & Co. (NYSE: TIF) Tuesday reported lower sales and earnings for the first quarter of 2019. Sales also missed analysts’ estimates, while earnings beat by a cent. The stock dropped about 4% in the pre-market session.
During the quarter, net sales were down 3% year-over-year to $1 billion, hurt by a 2% drop in comparable store sales. The top-line also came in below the estimates. All geographical regions registered a decrease in sales.
Consequently, net profit declined to $125 million or $1.03 per share from $142 million or $1.14 per share in the year-ago period. Earnings, meanwhile, topped expectations slightly.
Alessandro Bogliolo, CEO of Tiffany, said, “Our first quarter results reflect significant foreign exchange headwinds and dramatically lower worldwide spending attributed to foreign tourists. That said, we were pleased that, at the core of our business, global sales attributed to local customers, led by sales in China, grew over last year’s very strong sales results.”
Total comparable store sales dipped 2%, and all the geographical regions witnessed decline in sales
During the quarter, Tiffany opened two company-operated
stores, closed two stores and relocated two stores.
OUTLOOK
For fiscal 2019, the management expects worldwide net sales to increase by a low-single-digit percentage from last year, reflecting an increase of the same degree in comparable sales. Earnings, on a per share basis, are forecast to grow by a low-to-mid-single-digit percentage. The estimate for capital expenditures is $350 million.
Meanwhile, earnings a seen declining in the second quarter, owing to the continuing pressure on sales from lower foreign tourist spending, difficult comparisons to the year-ago period and sales deleverage on fixed costs.
DIVIDEND
The board of directors declared a regular quarterly dividend of $0.58 per share, representing a 5% increase, which will be paid on July 10 to shareholders of record on June 20.
Shares of Tiffany closed the last trading session higher but declined early Tuesday following the earnings report. They have gained 10% since the beginning of the year, after falling to a multi-year low in December last year.