Shares of Tiffany & Co. are expected to remain under pressure as the company faces a more challenging retail environment, said one analyst following the specialty retailer's lowered earnings guidance Friday.
After trimming its earnings outlook on declining U.S. sales, shares of Tiffany & Co. slumped 11.2 percent to close Friday at $35.08.
In a statement the day after retailers posted weak same-store sales for December, Tiffany said comps for the holiday season declined 2 percent in the U.S.
"Tiffany's holiday sales results were mixed, but we still expect to achieve strong earnings growth in the fourth quarter ending Jan. 31," said Michael Kowalski, chairman and chief executive officer, in a statement.
Goldman Sachs retail analyst Adrianne Shapira wrote in a research note that Tiffany's shares have "come under pressure as results show that even Tiffany is not immune to the current macro slowdown," and that she expects those shares to remain pressured "until a new and achievable bar has been set." She added that U.S. comps declined quickly and sharply from November's healthy 7 percent gain as store traffic softened, with January experiencing the same negative trends.
The specialty jewelry store said worldwide sales from Nov. 1 to Dec. 31 rose 8 percent over the prior year to $867.3 million. On a constant exchange rate basis, worldwide sales rose 6 percent as comps gained 1 percent.
On the U.S. front, retail sales increased 4 percent to $449.1 million. However, increased spending per transaction was offset by a decline in the number of transactions. International retail sales jumped 18 percent to $334.8 million. On a constant exchange rate basis, sales gained 12 percent while comps rose 5 percent. Direct marketing sales of $70 million was essentially flat over last year, and other sales fell by 20 percent to $13.5 million due to a reduction in wholesale sales of diamonds by $2.9 million.
Tiffany said it expects fiscal year 2007 earnings per diluted share to be between $2.25 and $2.28, compared with its previous forecast of between $2.25 and $2.30.
Kowalski said that, despite soft U.S. sales, the company is still projecting strong fourth-quarter earnings growth, excluding onetime charges, that it expected prior to the holiday season due to "substantially better gross margins and expense savings."The ceo added that the company has "aggressive plans for 2008," which include adding stores in the U.S. and overseas that would expand its store base by 12 to 15 percent, and introducing a "wide range of new products."
The company will provide updated guidance when it posts fourth-quarter and full-year results on March 24.
Exclusive: Nicola Formichetti is parting ways with @diesel after nearly four years. Formichetti, who served as Lady Gaga’s stylist in 2009, joined Diesel in 2013 as creative and artistic director. His first show debuted in Venice with a show held at the Venetian Arsenal. #wwdfashion #wwdnews
The polo shirt - an icon of preppy style - is roaring back into fashion in many creative guises, like this A-line polyester top from @carven, worn with @31philliplim cotton and elastane pants. Designers stretched a fashion classic into all kinds of new permutations this season. See how @mayteallende styled the preppy trend on WWD.com #wwdfashion (📸 : Kinya)
(Market Editors: @andrew_shang and @elmercer, Makeup: @amandawilsonmakeup using @fentybeauty, Hair: @gonn24, Model: @bara_holotova at @women360mgmt)
“I do like period [projects] a lot because I like creating those worlds, a world that is different from today," costume designer Mark Bridges said about the '50s British couture featured in @phantomthread. Bridges created the overall aesthetic and individual fashion looks for the film, which stars Daniel Day-Lewis, Lesley Manville and Vicky Krieps. Pictured here is a gown he designed for Krieps who plays Alma – the love interest of Day-Lewis' character, Reynolds Woodcock. #wwdfashion
@prada is embracing the holiday season with a series of short movies about the art of gift-giving. "The Postman's Gifts", which was directed by American filmmaker Autumn de Wilde, focuses on the brand's signature Prada Galleria bag and features Elijah Wood as the postman. In the first two episodes, Wood's delivers the iconic bag to @emmaroberts, who plays herself as a movie star, and Sasha Frolova. #wwdfashion
“I think I never met the person while we were working,” Vicky Krieps said of Daniel Day-Lewis, who she plays the love interest of in “Phantom Thread.” Day-Lewis remained perennially in character, so much so that she feels she’s just meeting him now. “It’s interesting to see how different he is in real life to the character,” Krieps said. WWD sat down with the 34-year-old actress to talk about her new role in the period film, which brings the fifties’ gender dynamics into the mix. Read more on WWD.com. #wwdeye (📷: @lexieblacklock)
@gucci has expanded its “Places” project to include six new cities. The initiative, which was first unveiled in July, aims to invite people to explore inspirational locations for the brand. On the list is the Biblioteca Angelica library in Rome pictured here. See the other five new venues on WWD.com. #wwdfashion (📷: @massimo_listri_official)
#ad From tools to lashes, WWD rounded up wellness and beauty products guaranteed to take your skin care and makeup routines to the next level in 2018. Follow along as @laceandleatherbyelyse, @ashnfashn and @elleisalwayshere experiment with these products on their Instagram profiles and blogs. #NewYearBetterYou
Blogger @camilacoelho is one of the fastest growing beauty influencers around the world. The bilingual blogger has worked with brands like @revolve Beauty, @dior, @louisvuitton and more and has an Earned Media Value of $34,338,441, according to @tribedynamics. But Coelho isn’t the only influencer making a major impact — head to WWD.com to see the other fastest-growing influencers in six key global markets. #beautyfridays (📷: @zefashioninsider)