Tiffany & Co. (NYSE:TIF) just lost some of its luster. On Tuesday, the company reduced its full-year earnings forecasts to below Wall Street estimates, citing a “markedly” weak holiday sales period. The stock responded in kind, dropping more than 10% by the mid-afternoon.
While the company announced global holiday increases of 6% in net sales and 4% in same-store sales on a constant-exchange-rate basis, the same-store figure was almost half of the 7.4% increase Wall Street expected. CEO Michael J. Kowalski said in a press release that the results reflected “restrained spending by consumers for fine jewelry.”
While same-store sales in the Asia-Pacific region and Japan were up 12% and 6%, respectively, sales growth crawled in the Americas, where Internet and catalog sales also dropped. Same-store sales also were down 4% — a result the company likely expected in November, when CFO Patrick McGuiness said he was “certainly not implying that Tiffany will be completely insulated” from the economic shockwaves emanating from Europe during an earnings conference call.
Tiffany adjusted its full-year earnings, expecting 23% to 25% growth to $3.60 to $3.65 per share, down from November’s prediction of $3.70 to $3.80 and below analysts’ expectations of $3.75 per share.
Tiffany had a tumultuous 2011 that ultimately saw its stock gain 6.4% in value, compared to a flat S&P 500. However, TIF shares are down 10% from their start above $66 in 2012.
Tiffany will report fourth-quarter and full-year earnings on Tuesday, March 20.