Tiffany Holiday Period Worldwide Net Sales Down 6%; Cuts FY15 Profit View

(RTTNews) - Tiffany & Co. (TIF) reported that its worldwide net sales for the two-month period ended December 31st or "holiday period" were $961 million, down 6% from the prior year. Results were negatively affected by the strong U.S. dollar and weak tourist spending in a number of markets. The company cut its fiscal year 2015 net earnings outlook.

While financial plans for 2016 have not been finalized, the company currently believes that the strong dollar and global macro challenges will likely result in minimal growth in net sales and net earnings, as reported in dollars and excluding charges in 2015, for the year. All assumptions and expectations are approximate and may or may not prove valid.

On a constant-exchange-rate basis that excludes the effect of translating foreign-currency-denominated sales into U.S. dollars, worldwide net sales for the holiday period declined 3%, due to declines in the Americas and Asia-Pacific offsetting growth in Japan and Europe; and comparable store sales declined 5%. There were no noteworthy differences in performance among jewelry categories.

The company expects net earnings in the year ending January 31, 2016 to decline approximately 10% from last year's $4.20 per share, excluding the loan impairment charge in the second quarter of 2015 and a debt extinguishment charge in 2014. Previously, the company expected net earnings to decline 5%-10% in the fiscal year.

In addition, the forecast excludes a charge of approximately four cents per share being recorded in the fourth quarter for staff and occupancy reductions. The forecast did not assume recording any additional loan impairment charges.

The Company maintains its forecast to generate at least $500 million of free cash flow in the full year.