By Claire Valdini
Qatar Holding purchased 5.2% stake in US jeweller in April for around $437m
Tiffany & Co, the world’s second largest jewellery retailer, said worldwide net sales increased three percent while comparable store sales declined one percent compare to the same period the previous year.
The high end jeweller, which cut its sales and earnings forecasts on Monday for the second straight quarter, said net earnings, excluding the effect of currency exchange-rate fluctuations, declined 17 percent.
“Not surprisingly, sales growth has been affected by economic weakness in a number of markets and by a very challenging prior-year comparison to a 30 percent increase in worldwide net sales,” Michael J. Kowalski, chairman and chief executive officer of Tiffany & Co, said in a statement.
“We also anticipated the reduced operating margin in the quarter, adjusted for nonrecurring items, due to continued, but moderating, high product input costs and a lack of sales leverage on fixed costs,” he added.
Qatar Holding, the Gulf state’s sovereign wealth fund purchased a 5.2 stake in Tiffany for around $437m in April.
Tiffany earlier in the week cut its sales and earnings forecast amid slow a slowdown in China and Europe and a damping of higher-end jewellery sales in its home market.
The firm reduced its global net sales forecast by one percentage point to range of 6-7 percent for the year ending January and lowered its full year profit outlook to $3.55-3.70 a share from $3.70-3.80.
Global net sales will increase as much as seven percent this year, down from a previous forecast of a maximum of eight percent, and an original projection of ten percent, Tiffany said.
In spite of its cautious forecasts the firm will continue to expand its operations, opening an additional 28 stores by the end of the year.