Who wants to have breakfast, or a bauble, at Tiffany’s? Neither tourists nor traders, apparently.
Luxury jewelry chain Tiffany & Co. slashed its forecast for the year, as did Kay and Jared owner Signet Jewelers. Investors were displeased, sending Tiffany’s stock down 8% to $56.83 a share in midday trading in New York. Signet took a 11.5% drop to $42.28.
Concerns about Greece and debt in the Eurozone as well as high silver prices and discounts from rivals have shoppers, especially Wall Street financial types, spending less at Tiffany’s, the company said.
The company plans to roll out more products at more price points, including an Art Deco collection tied to the launch of the film version of "The Great Gatsby."
The chain's flagship store in New York saw sales slump 4% overall, with tourist spending flat. Same-store sales didn’t improve in the U.S., where the average purchase came at a higher price. In Europe, where executives said economic conditions are "obviously less than ideal," same-store sales slid 4%.
They're up 11%, however, in the Asia Pacific region. But even in China, sales growth trends "have decelerated from the extraordinarily strong rates last year," said Mark L. Aaron, vice president of investor relations, in a conference call with analysts.
Tiffany's profit in the first quarter, which ended April 30, was nearly flat at $81.5 million, or 64 cents a share, from $81.1 million, or 63 cents a share a year earlier. Revenue was up a disappointing 8% to $819.2 million, with same-store sales up 4%.
Shaken, Tiffany's dropped its predicted earnings per share for the year to between $3.70 and $3.80. Earlier, it had anticipated $3.95 to $4.05 a share. The company expects sales to be up -- but only 7% or 8%, not the 10% it had previously forecast.
Signet's first-quarter profit was $82.5 million, or 96 cents a share for the period ended April 28. In the year-earlier period, net income was $75.4 million, or 87 cents a share.
The jeweler's revenue was up 1% to $900 million, from $887.3 million; same store sales rose 1.2%.
But the Bermuda-based company's second-quarter profit forecast of 78 cents to 84 cents came in below analysts' expectations.