The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — Tiffany's first-quarter profit slid as consumers cut spending and the jeweller issued a pessimistic outlook, sending shares down sharply Wednesday.
The strong dollar is creating intense pressure on international sales.
The retailer's revenue also tumbled 7.4 percent to $891.3 million, well short of the $924.1 million that Wall Street had expected, according to a survey by Zacks Investment Research.
Tiffany said it expects per-share earnings this year to fall in the single-digit percentage range from last year, and also expects a decline in per-share earnings similar to the first quarter.
Profit fell 16.6 percent to $87.5 million, or 69 cents per share. Earnings, adjusted for pretax gains were 64 cents per share, which was four cents short of analyst projections.
In the Americas region, total sales fell 9 percent to $403 million on softness in spending by US customers and tourists. Sales in the Asia-Pacific region fell eight percent to $238 million and sales in Europe fell nine percent to $97 million.
Looking ahead, the company expects full-year profit to fall "by a mid-single-digit percentage" as well as a drop in upcoming second-quarter profit.
Tiffany shares which have fallen 16 percent this year, fell 4 percent, or $2.63, to $61.22 before the opening bell.
L Catterton, the private-equity firm with close ties to LVMH and Bernard Arnault that’s preparing to take Birkenstock public, has become an investment giant in the consumer-goods space, with stakes in companies selling everything from fashion to pet food to tacos.
Any fashion company that is contemplating going public needs to have not only the product and brand fundamentals right but also a business strategy that can easily be understood by the markets, writes Imran Amed.
Consumer spending increased just 0.8 percent last month as the labour market cools.
The US economy grew at a slightly less brisk pace than initially thought in the second quarter as businesses liquidated inventory, but momentum appears to have picked up early this quarter as a tight labour market underpins consumer spending.