Tif­fany fore­casts sur­prise de­cline in full-year profit

The Pak Banker - - COMPANIES/BOSS -

LON­DON: Lux­ury jeweler Tif­fany & Co (TIF.N) forecast a sur­prise de­cline in full- year profit and re­ported an un­ex­pected fall in sec­ond-quar­ter sales as a strong dol­lar dis­cour­aged tourist spend­ing in the United States and re­duced the value of over­seas sales.

The com­pany's shares fell 5.3 per­cent in pre­mar­ket trad­ing on Thurs­day. Tif­fany said it ex­pects net earn­ings to fall 25 per­cent in the year end­ing Jan­uary, com­pared with its ear­lier forecast of "min­i­mal growth". "The ad­verse ef­fects from the strong dol­lar have been even more sig­nif­i­cant than ini­tially ex­pected, Chief Ex­ec­u­tive Fred­eric Cu­me­nal said in a state­ment. New York-based Tif­fany, which gets about half of its sales from out­side the Amer­i­cas, has said cur­rency fluc­tu­a­tions have re­duced sales by 2-7 per­cent in the past three quar­ters. The av­er­age value of the dol­lar .DXY in the MayJuly pe­riod has risen about 19 per­cent from a year ear­lier.

Tif­fany's to­tal rev­enue fell 0.2 per­cent, to $990.5 mil­lion in the quar­ter ended July 31 from $ 992.9 mil­lion a year ear­lier. An­a­lyst on av­er­age had ex­pected sales to rise to $1 bil­lion, ac­cord­ing to Thom­son Reuters I/B/E/S. Ex­clud­ing cur­rency ef­fects, rev­enue rose 7 per­cent. Net in­come fell 15.4 per­cent to $104.9 mil­lion, or 81 cents per share, due to higher ex­penses and a loan given to a diamond min­ing com­pany. Ex­clud­ing items, Tif­fany earned 86 cents per share, while an­a­lysts had ex­pected 91 cents. The com­pany's full-year forecast trans­lates to a profit of about $3.99 to $4.12 per share. An­a­lysts had ex­pected earn­ings to rise to $4.26 per share from the $4.20 per shares Tif­fany earned a year ear­lier. Tif­fany's shares were trad­ing at $79 be­fore the bell on Thurs­day. Up to Wed­nes­day's close, the stock had fallen 20.4 per­cent this year.

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