Tiffany & Co
Sales sank more than 20 percent in the current quarter to date, Tiffany said, in the latest sign that consumers around the world -- even affluent ones -- were cutting back on discretionary purchases as the economic downturn showed no signs of abating.
Tiffany has clearly not been immune from global economic turmoil in recent months and we are taking a cautious view to business conditions in 2009, Chief Executive Michael Kowalski said in a statement.
Even its flagship store in Manhattan, which is usually inundated with tourists, faced a 34 percent sales decline in the past quarter.
While high-end stores like Tiffany were among the last to face the repercussions of the recession, they have also taken a hit to sales in recent months, much like more mid-tier stores.
Its net profit fell to $31.1 million, or 25 cents per share, in the fiscal fourth quarter ended January 31, compared with $127.4 million, or 96 cents per share, a year earlier.
Excluding one-time items such as restructuring, Tiffany earned 85 cents a share, topping the average analyst estimate of 78 cents a share, according to Reuters Estimates.
Sales fell 20 percent to $841.2 million, with the decline in the Americas region hurting it the most, Tiffany said.
Quarterly sales fell 3 percent in the Asia-Pacific region and 2 percent in Europe.
For the current fiscal year, the New York-based retailer said it is assuming a sales decline of about 11 percent. It also expects full-year earnings of between $1.50 a share and $1.60 per share from continuing operations.
Analysts expect it to earn $1.73 a share on that basis.
While Tiffany is keeping a tight lid on costs, the jeweler said it will continue with opening 13 new stores in the year, new products and focused marketing to attract shoppers.
The New York-based retailer recently disclosed plans to close its ailing Iridesse pearl jewelry stores.
In the past quarter, it offered early retirement packages to about 800 employees, of which 600 took the offer, Tiffany said.
Those actions would result in a 10 percent cut in its worldwide staff, and about $60 million in pre-tax savings in 2009, Tiffany said.
(Reporting by Aarthi Sivaraman; Editing by Steve Orlofsky, Dave Zimmerman)