Luxury jeweler Tiffany & Co. reported Monday morning that it saw a dip in holiday sales, a decline that is leading the retailer to reduce its full-year 2014 earnings guidance and sending Tiffany shares for a more-than 11% tumble in early Monday trading.
Tiffany reported $1.02 billion in worldwide net sales for the two months ending on December 31, a 1% decline over holiday sales during the same time in 2013. On a constant-currency basis worldwide net sales increased 3%, but same store sales were flat.
Breaking the holiday sales results down by geographic region reveals that sales in the U.S. fell 1% to $544 million; Asia-Pacific sales rose 7% to $210 million thanks to strength in China and Singapore; in Japan, which still suffering from a high consumption tax, sales dropped 16% to $113 million; and in Europe, sales ticked up 1% to $133 million.
Tiffany said that in view of these results, it is lowering its full-year 2014 earnings outlook from a range of $4.20 to $4.30 per share to a new range of $4.15 to $4.20 per share. While earnings that fall in this new range would still mark an 11% to 13% increase over the $3.73 in earnings per share reported for 2013, the results would be well below the $4.34 Wall Street consensus.
Canaccord Genuity analyst Laura Champine said in a research note Monday morning that this new forecast implies a fourth-quarter earnings per share figure in the range of $1.46 to $1.51, results that would be roughly in line with the $1.47 in earnings per share Tiffany recorded during the fourth quarter of 2013. Canaccord raised Tiffany’s price target by $3 to $100, though maintained its “hold” rating and lowered Tiffany’s fourth quarter constant currency same store sales estimate to -0.3% with Champine noting, “We remain on the sidelines given the deteriorating top-line trends.”
Indeed, Tiffany president Frederic Cumenal warned of holiday season headwinds continuing into the new year. “We are planning cautiously as we anticipate significant headwinds from the stronger U.S. dollar against all of our key currencies that, as we experienced in the holiday period, negatively affects both the translation of results and sales to tourists in the U.S,” he said in a statement Monday.
Read more at Forbes.