AP Images/Paul Sakuma
(Reuters) – Tiffany & Co reported lower-than-expected quarterly sales and a surprise drop in comparable sales due to lower spending by tourists and domestic customers in the Americas, its largest market.
The company’s shares fell 5.6 percent to $ 87.95 before the bell on Wednesday.
Tiffany, whose one-of-a-kind pieces are a regular feature on Hollywood red carpets, has been struggling to attract young shoppers, particularly in the Americas, as consumers shift to cheaper, chic brands such as Pandora A/S and Alex and Ani.
Comparable-store sales in the Americas, which account for nearly half of Tiffany’s revenue, fell 4 percent, while the company posted a 3 percent decline in the Asia-Pacific region in the first quarter due to lower spending by Chinese tourists.
Analysts polled by Consensus Metrix expected a 0.5 percent drop in the Americas and a growth of 1.3 percent in the Asia-Pacific region in the quarter ended April 30.
Worldwide sales at stores established for more than a year fell 3 percent for the sixth straight quarter, compared with a 1.1 percent rise expected by Consensus Metrix.
The company also said it expected its net sales to increase by a low single-digit percentage for the fiscal year ending Jan. 31, 2018.
Excluding a tax benefit of 2 cents per share, Tiffany earned 72 cents, beating analysts’ average estimate of 70 cents, according to Thomson Reuters I/B/E/S.
Net sales rose marginally to $ 899.6 million in the first quarter, but missed analysts’ average estimate of $ 913.71 million.
Net income increased to $ 92.9 million, or 74 cents per share, from $ 87.5 million, or 69 cents per share, a year earlier.
(Reporting by Gayathree Ganesan in Bengaluru; Editing by Martina D’Couto)
