Tiffany & Co. felt the currency squeeze in the first quarter as tourists put away their pocketbooks.

Net earnings fell 12 percent to $125.2 million, or $1.03 a share, from $142.3 million, or $1.14, a year earlier. Profits came in 1 cent shy of the $1.02 per share projected by Wall Street.

Sales for the quarter ended April 30 declined 2.9 percent to $1 billion from $1.03 billion. Comparable sale were hurt by currency translations and fell 5 percent, including a 5 percent drop in the U.S. and the Asia-Pacific region, a 4 percent decrease in Europe and Japan.

Alessandro Bogliolo, chief executive officer, told WWD that the brand remains strong in China, a major focus of future growth for the brand, but that exchange rates make it more expensive for Chinese visiting the U.S.

Bogliolo said “a very strong U.S. dollar and a very weak renminbi make the purchase in China more interesting.”

While there has been some growing concern about the U.S.-China trade war and that it’s starting to hurt consumer sentiment in both countries, the ceo said the American brand is still greeted warmly and has enjoyed double-digit growth in China.

“We have not felt any form of hostility or even comments or criticism at all,” Bogliolo said.

Tiffany is not immune to the trade war and is feeling the pain of many companies in fashion — just in reverse since it is one of the few brands to sell goods in China that are made in the U.S. (Most of the rest of the fashion industry is worried about duties on goods made in China and intended for U.S. customers).

After President Trump began clamping down on Chinese imports last year with higher tariffs, China retaliated with higher duties on certain goods made in the U.S., including jewelry.

Bogliolo said the average tariff increase for that part of Tiffany’s business was about 10 percent, but that the brand would take the gross margin hit and not pass on those costs in order to remain competitive.

“We will not penalize the consumer consumers for retaliatory duties,” he said. “We are really trying to be neutral, consumer-wise.”

The timing is tough for Tiffany since China had cut import duties recently, lowering prices on jewelry across the market.

And while currency changes are keeping tourists away from the U.S., the brand’s customers at home have also taken a step back.

“The U.S. customer is very cautious in their purchases,” Bogliolo said. “The sales are slightly positive, but I see a lot of caution.”

The ceo has been working to supercharge Tiffany with a strategic plan that emphasizes an evolved brand message, renewed product offerings, a competitive and omnichannel profile, more efficient operations and an agile organization.

Analysts seem to be giving the company the benefit of the doubt.

Wells Fargo’s Ike Boruchow noted, “Unfortunately, after a robust start to 2018 — driven by incremental product innovation, new marketing campaigns and a heavy re-investment back into the business — Tiffany’s fundamentals have now been challenging for the past six months.

“While Tiffany is currently under pressure, we do believe that a large driver of their underperformance has been macro related, primarily around Chinese spending abroad,” Boruchow said.

As a kind of stock sweetener, Tiffany boosted its regular quarterly dividend by 5 percent to 58 cents share.

Investors were receptive and pushed shares of the jeweler up 2.6 percent to $92.50 in midday trading Tuesday.