Tiffany & Co, (NYSE: TIF) reported lower-than-expected first-quarter sales and a surprise drop in comparable sales due to lower spending by tourists and domestic customers in the Americas, its largest market.
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%, while the company posted a 3% decline in the Asia-Pacific region in the first quarter due to lower spending by
Chinese tourists.
Analysts had expected a 0.5% drop in the Americas and a growth of 1.3% in the Asia-Pacific region in the quarter ended April 30.
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. Earnings from operations as a percentage of net sales was 16.2% in the first quarter, compared with 15.1% a year ago.
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. Management also expects for fiscal 2017, net cash of about $700 million and free cash flow in the neighborhood of $450 million.
The stock’s price dropped $7.50, or 8.1%, to $85.64, within a 52-week range of $56.99 to $97.29.
