Tiffany & CO has warned investors to expect minimal growth in the next 12 months.
They are likely to see a decline in 30 % in the net earnings of first quarter and a modest decline in the second, and then followed by the anticipated double digit percentage net earnings increase in third and fourth quarters.
This is the first drop in Tiffany’s sales in five years.
Shares fell to $83.00, the lowest intraday price since March 10, and were trading at $83.37 in New York. The stock is down 22 percent this year.
The stronger U.S. dollar is the reason behind the downfall, which has affected foreign tourist spending in U.S. and it had also lowered the value of the company overseas sales.
“By now it should be clear that Tiffany is facing challenges from global economic uncertainties, especially from the effect of a strong US dollar on the translation of foreign-denominated sales into dollars and on foreign tourist spending in the US,” said stated Tiffany & Co president, Frederic Cumenal.
He further added “As a result, we have adopted a cautious approach in our planning for the coming year, anticipating modest growth in net sales and minimal net earnings growth for the full year; this assumes pressure on sales and earnings in the first half of the year followed by healthy growth in the second half.”
“Our plans for 2015 call for adding a net of 12-15 company-operated stores across most regions, introducing compelling new jewellery and watch designs, including Tiffany’s new CT-60 watch collection being introduced next month, and continuing to invest in new systems and in our people to enable us to most effectively deliver an exceptional in-store experience to our growing base of customers.”