Jeweller part-owned by Qatar Investment Authority also forecasts bigger fall in full-year profit
Tiffany & Co, the jewellery brand part-owned by Qatar, reported a drop in quarterly sales and forecast a bigger fall in full-year profit than previously expected as a strong dollar kept tourists from spending in its showpiece US stores.
A bright spot in Tiffany's otherwise disappointing third-quarter results was Japan, where sales rose 17 percent to $133 million after falling for a year due to an increase in the country's consumption tax.
Analysts, however, predicted a miserable holiday season as the company's traditional reluctance to offer promotions turns away thrifty customers pulling back on discretionary spending.
Tiffany has been revamping its fine jewellery product lines, such as Victoria and Bows, and introducing new fashion jewellery to attract younger, style-conscious shoppers.
"The biggest concern is that they are not promotional," said Edward Jones analyst Brian Yarbrough, adding that the Paris attacks and a possible US rate hike could weigh further on tourist spending, a key driver of Tiffany's sales.
Substantial investment in advertising and marketing has yet to bear fruit. Worldwide comparable sales fell 5 percent in the third quarter, a much bigger drop than the 0.8 percent decline expected by analysts, according to Consensus Metrix.
Tiffany said it expected earnings to fall by 5 percent to 10 percent in the year ending January 31. It had earlier forecast a 2-5 percent decline.
The company attributed its latest forecast cut to "volatile, uncertain economic and market conditions" in the United States and elsewhere, which are affecting consumer spending.
Revenue fell 2.2 percent to $938.2 million for the quarter ended October 31, below the average analyst expectation of $971 million.
Tiffany was originally founded in New York City in 1837. Today, 8.7 percent of its shares are owned by the Qatar Investment Authority.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.