NEW YORK, United States — Tiffany & Co., the world’s second- largest luxury jewelry retailer, missed third-quarter profit estimates and cut its forecast after sales in Japan and other Asian markets slowed.
Net income tumbled 60 percent to $38.3 million, or 29 cents a share, from $94.6 million, or 73 cents, a year earlier, the New York-based company said in a statement today. Excluding a one-time loss related to repaying debt, earnings amounted to 76 cents, missing the 77 cents projected by analysts.
Chief Executive Officer Michael Kowalski, who will step down in 2015, said the company is facing “economic and geopolitical challenges around the world.” Still, the jeweler is boosting marketing and adding new stores in a bid to maintain growth. Tiffany also is raising prices, including on entry-level pieces like sterling silver jewelry and other items part of its new Tiffany T collection that debuted last quarter.
Tiffany shares fell as much as 2.8 percent to $102.06 in early trading after the results were released. Through yesterday’s close, the shares had added 13 percent this year.
While same-store sales increased 11 percent in the Americas last quarter, they declined 3 percent in the Asia-Pacific region. In Japan, comparable-stores sales dropped 6 percent, hurt by the nation’s sluggish economy and a new consumption tax.
Tiffany also scaled back its full-year forecast, calling for a sales increase in the mid- to high-single digits. The company had previously said the growth would be in the high- single digits. It maintained its profit forecast of $4.20 to $4.30 a share for the fiscal year, which ends on Jan. 31.
President Frederic Cumenal will take over the top job on April 1, the company said last month. Kowalski will remain on the board as nonexecutive chairman.
Tiffany ranks second to Cie. Financiere Richemont SA in global sales of luxury jewelry.
By Lindsey Rupp; editors: Nick Turner, Kevin Orland.