Tiffany & Co. posts slowdown in demand

PanARMENIAN.Net - Tiffany & Co. cut its outlook for both sales and profit for the year, citing a slowdown in demand for its jewelry not only in the U.S. but in many other countries, AP reported.

The lowered outlook delivered Thursday, may 24 came as the luxury chain reported that its profit for the first quarter was essentially the same as a year ago, hurt by business at home.

The affluent have picked up spending since the Great Recession ended in mid-2009, recovering faster than other segments. But since late last year, Tiffany has seen a slowdown in spending among its U.S. customers as the stock market has weakened and worries have intensified about the debt crisis in Europe.

Tiffany reported net income of $81.5 million, or 64 cents per share, in the quarter ended April 30. That compares with $81.1 million, or 63 cents per share, a year ago.

Worldwide revenue rose almost 8 percent to $819.2 million. Revenue at stores open at least a year rose 4 percent. The measure is an indicator of a retailer's health.

Tiffany said during its earnings call that it's seeing restrained spending by people employed in the financial industry, normally key customers for jewelry. It noted rivals have increased discounting. And it said price increases driven by higher silver costs may have scared off some entry-level buyers.

Tiffany said that sales in the Americas region, which include the U.S., Canada and Latin America, rose 3 percent to $386 million. Revenue at stores open at least a year was unchanged from a year ago but that key metric fell 4 percent at Tiffany's flagship New York store.

Sales in Europe rose 3 percent overall to $88 million but revenue at stores open at least a year there fell 4 percent. Total sales in the Asia-Pacific region rose 17 percent to $195 million as revenue at stores open at least a year there increased 11 percent. In Japan, Tiffany posted a 15 percent increase in sales to $142 million on the same percent rise in revenue at stores open at least a year.