Tiffany profit trails estimates as strong dollar hurt sales

NEW YORK – Tiffany & Co. posted third-quarter profit that trailed analysts’ estimates and cut its forecast for earnings this year as the strong dollar and choppy economic conditions weigh on sales of luxury jewelry.

Profit was 70 cents a share, excluding some items, the New York-based company said in a statement Tuesday. Analysts estimated 75 cents, on average. Earnings per share will fall 5 percent to 10 percent this year, more than an earlier forecast for a drop of as much as 5 percent, the company said.

The results underscore the challenge that retailers like Tiffany face with the strong dollar, which curtails spending from tourists visiting the U.S. and reduces the value of revenue generated abroad. CEO Frederic Cumenal said in the statement that unsettled economies also are restraining shoppers’ appetites for luxury goods.

“Volatile, uncertain economic and market conditions in the U.S. and other regions are affecting consumer spending, causing us to maintain a cautious near-term outlook,” Cumenal said.

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The shares fell 5.9 percent to $72 at 6:51 a.m. in early trading in New York. Tiffany already had slid 28 percent this year through Monday.

Third-quarter revenue dropped 2.2 percent to $938.2 million, trailing analysts’ $971.3 million average estimate. Net income more than doubled to $91 million, or 70 cents a share, from $38.3 million, or 29 cents.

Sales miss

Even after accounting for the effect of the strong dollar, Tiffany’s sales still trailed estimates in most of its operating regions. Comparable-store sales excluding currency effects fell 6 percent in the Americas, missing analysts’ average estimate for a 2 percent decline. Comparable sales rose 6 percent in Europe and 2 percent in Asia-Pacific. Analysts had estimated gains of 8.5 percent and 6 percent, respectively.

The only operating unit that topped estimates was Japan, where the 24 percent comparable sales gain beat the 11.7 percent increase that was projected.

Cumenal, who became CEO in April, is trying to build brand loyalty with a line of luxury watches and is pushing Tiffany into new markets through collaborations. Earlier this month, Tiffany partnered with edgy multi-brand retailer Dover Street Market in an effort to appeal to younger consumers.

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