Tiffany Cuts Guidance, Staff on Soft Holiday Sales

Tiffany & Co. said Tuesday that sales during the holiday period softened, prompting the luxury jeweler to reduce staff and cut its outlook for the year.

The New York company said "challenging and uncertain global economic conditions" have resulted in restrained consumer spending, and a stronger U.S. dollar continues to dent foreign tourist spending. For the crucial holiday shopping season, Tiffany reported a 3% currency-adjusted drop in world-wide sales and a 5% decline in sales at stores open at least a year.

Following the disappointing period, Tiffany reduced its forecast for its fiscal year ending Jan. 31. Adjusted earnings will decline about 10%, Tiffany said, guidance that translates to $3.78 a share. Analysts have projected $3.88 in adjusted per-share earnings this year.

The updated outlook excludes a charge of roughly 4 cents a share that Tiffany is booking in the fourth quarter for "staff and occupancy reductions." A spokesman declined to comment on the number of people Tiffany is laying off. He said the occupancy portion of the charge stems from space in the company's corporate offices and isn't related to store closings.

The jeweler isn't alone in reporting disappointing holiday sales. Larger retailer Macy's Inc. warned that sales at existing stores fell 4.7% in November and December and said it would cut thousands of jobs as it closes stores, and Gap Inc., which is also shutting shops, said December sales for existing stores fell 5% from a year earlier. On Friday, the government reported a 0.1% decline in December U.S. retail sales, closing out the weakest year for sales growth since the end of the recession in 2009.

Tiffany was one of many retailers that warned in November that holiday sales would disappoint. The company's struggle with adverse currency rates has been ongoing, as nearly a quarter of Tiffany's U.S. sales and roughly 40% of sales at its flagship Fifth Avenue store in Manhattan come from foreign tourists.

Shares in the company, down 15% over the past three months, slid 2.5% in light premarket trading.

Write to Lisa Beilfuss at [e-mail]

(END) Dow Jones Newswires

January 19, 2016 08:35 ET (13:35 GMT)

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