Japan Hurts Tiffany, Posts Sharp Fall in Q3 Profits

Luxury jeweler Tiffany & Co reported a sharp fall in profits for the third quarter and lowered its earnings forecast, hit by tame sales in Japan and higher costs for precious metals and diamonds.

 

Third-quarter profit was $20.8 million, down from $28.0 million in the third quarter of last year.

Sales, however, in the quarter rose to $461.2 million from $430.1 million the year before, with sales at comparable stores up 3 percent.

For the first nine months of the year, sales rose 10 percent to $1.395 billion, compared with $1.268 billion in the prior year, and comparable store sales rose 8 percent. Net profits were $97.7 million compared with $105.0 million.

Tiffany said results were below expectations in Japan, where it has changed its product mix, brought in new products, and opened new stores in order to boost sales.

The company also lowered its forecast for full-year earnings to a range of $1.43 to $1.48 a share, down from its previous prediction of $1.55 to $1.60.

It forecasts high single-digit global sales growth in the fourth quarter but said gross margin will be lower than previously expected.