Tiffany & Co. (NYSE: TIF) on Wednesday reported worse-than-expected first quarter sales and an unexpected drop in comparable sales, sending its shares down more than 8 percent.
The New York-based company has been struggling to attract younger customers and tourists in the Americas. Tiffany said comparable sales in the American dropped 4 percent in the first quarter. Analyst had estimated an 0.2 percent decline.
Total sales came in $899.6 million in the quarter ended April 30, missing analysts’ estimate of $914.4 million. The company blamed the disappointing result on weak demand on domestic market and a strong dollar that affected the spending by foreign tourists.
But the company beat earnings projection as operating margins increased. Tiffany earned 74 cents a share in the first quarter, topping analysts’ estimate of 70 cents per share.
Michael J. Kowalski, Chairman of the Board and Interim Chief Executive Officer, said, “While these results modestly exceeded our near-term expectations, we are focused on executing long-term strategies to achieve stronger and sustainable performance through product introductions, optimization of our store base, effective marketing communications and the delivery of experiences that resonate with our customers. In so doing, we believe TIFFANY & CO. is well-positioned to generate an attractive total shareholder return over the long-term.”
Tiffany shares fell as much as 8.17 percent to $85.52 per share on Wednesday.
To turnaround the situation, the company has been introducing new designs that are promoted by singer Lady Gaga and hired former Coach Inc creative director Reed Krakoff as its first chief artistic officer.