Strong dollar hits Tiffany & Co first-quarter sales

Tiffany & Co has reported a 5% drop in global sales in the quarter ended April 30, 2015, which it is attributing largely to the strong US dollar affecting conversion from international sale prices. Worldwide net sales of $962 million (£626.6m) were 5% below the previous year. However, the firm stressed that on a constant-exchange-rate basis excluding the effect of translating foreign-currency-denominated sales into US dollars, worldwide net sales actually rose 1%. This was due to growth in all regions except Japan and driven by increased sales of fashion gold jewellery and statement jewellery. The statement said: "Net sales and earnings declines, albeit smaller than anticipated, reflected the negative effects from the strong US dollar and a difficult year-over-year sales comparison in Japan." Management maintained its earnings guidance for the year ending January 31, 2016, as specified in the news release on March 20th. However, in Europe on a constant-exchange-rate basis, total sales increased 21% and comparable store sales increased 17% due to growth across continental Europe reflecting robust spending by foreign tourists as well as higher sales to local customers. As reported in US dollars, total sales in Europe increased 2% to $103 million. In the first quarter: Worldwide net sales of $962 million were 5% below the prior year. However, on a constant-exchange-rate basis excluding the effect of translating foreign-currency-denominated sales into U.S. dollars (see "Non-GAAP Measures" schedule), worldwide net sales rose 1% due to growth in all regions except Japan and driven by increased sales of fashion gold jewellery and statement jewellery; worldwide comparable store sales on that basis were 1% below last year. Net earnings declined 17% to $105 million, or $0.81 per diluted share, compared with $126 million, or $0.97 per diluted share, a year ago, due to the lower sales as well as higher SG&A (selling, general and administrative) expenses primarily related to marketing spending. Tiffany's CEO Frederic Cumenal said, "We started the year facing well-known challenges from both global economic uncertainties and the effect of a strong US dollar on the translation of foreign-denominated sales into dollars and on foreign tourist spending in the US, as well as a difficult sales comparison in Japan. "Despite those factors, our first quarter results for net sales, as well as for gross margin and net earnings, were somewhat better than we anticipated."

Strong dollar hits Tiffany & Co first-quarter sales

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