Strong US Dollar Negatively Impacts Tiffany Results
March 20, 16
(IDEX Online News) – Tiffany & Co. has reported its financial results for the twelve month and fourth quarter period ended January 31, which showed that the strength of the US dollar has negatively affected sales and earnings.
On a constant exchange rate basis, year-over-year worldwide net sales rose 2 percent in Asia-Pacific, Japan and Europe. Reported in US dollars, however, net sales declined 3 percent to $4.1 billion compared to $4.25 billion over the same period in the year prior.
In the fourth quarter, worldwide net sales dipped 2 percent, following lower sales in the Americas and Asia-Pacific regions. Sales growth for comparable stores in Japan and Europe showed a 5-percent decline. Worldwide net sales showed a 6-percent decrease, falling to $1.2 billion compared to $1.28 billion in the same quarter a year previously.
In the Americas, total sales on a constant-exchange-rate and comparable store sales declined 2 percent and 4 percent respectively. In US dollars, total sales over the full year declined 4 percent to $1.9 billion.
Total sales in the Asia-Pacific region on a constant-exchange-rate basis rose 3 percent for the full year, while comparable store sales were unchanged. Total sales of $1.2 billion over the full year, represented an 2-percent decline on the prior year, exacerbated by weakness in Hong Kong.
In Japan, total sales on a constant-exchange-rate basis rose 10 percent and comparable store sales increased 5 percent. In US dollars, over the full year period total sales declined 2 percent to $541 million.
Total sales in Europe on a constant-exchange-rate basis increased 12 percent and comparable store sales increased 9 percent. On a year-over-year basis, total sales decreased 1 percent to $506 million.
“We faced various challenges during the year that negatively affected our financial results, especially related to the strong U.S. dollar,” said Tiffany & Co. CEO Frederic Cumenal.
“Worldwide sales growth of only 2 percent on a constant-exchange rate basis, or down 3 percent as reported, along with the lack of earnings growth, did not meet the forecasts we had communicated at the start of the year; however, we were pleased with an increase in gross margin, strong free cash flow, and our ability to return cash to shareholders through another dividend increase and share repurchases.”
Tiffany operates 307 stores worldwide, an increase from 295 a year previously.