The company's shares fell over 5% before the bell on Wednesday.
Tiffany & Co reported lower-than-expected quarterly sales and a surprise drop in comparable sales, underscoring the upscale jeweler’s struggles with a strong dollar that has crimped spending by tourists and weak demand at home.
The company’s shares fell 5.6% to $87.95 before the bell on Wednesday.
The dollar has strengthened versus other currencies, so some of Tiffany’s issues in the United States are more currency-related, Edward Jones analyst Brian Yarbrough told Reuters.
Comparable-store sales in the Americas, which account for nearly half of Tiffany’s total revenue, fell 4%, while the company posted a 3% decline in the Asia-Pacific region in the first quarter.
Analysts polled by Consensus Metrix expected a 0.5% drop in the Americas and a growth of 1.3% in the Asia-Pacific region in the first quarter ended April 30.
“Mainland China was very strong, but other parts of China were weaker and Macau and Hong Kong have been struggling now for a little while,” Yarbrough added.
Tiffany, whose one-of-a-kind pieces are a regular feature on Hollywood red carpets, has also been struggling to attract young shoppers, who tend to prefer cheaper, chic brands such as Pandora A/S and Alex and Ani.
The luxury retailer, which ousted CEO Frederic Cumenal in February, struck a surprise deal with activist shareholder JANA Partners to add three directors to its board to revive struggling sales and entice younger shoppers.
Worldwide sales at stores established for more than a year fell 3% for the sixth straight quarter, compared with a 1.1% 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.