Tiffany & Co. trims profit outlook for year, blames fewer tourists at US stores

Jewelry retailer Tiffany & Co. topped first-quarter profit expectations but trimmed its profit outlook for the year due to fewer tourists at U.S. stores, particularly from China.

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Earlier this year, Tiffany said holiday sales were hurt by a drop in spending by Chinese tourists. Instead of shopping in the U.S., Chinese tourists have been buying Tiffany’s at home instead.

The strong dollar has made items from Tiffany more expensive for Chinese visitors, a group which accounts "for more than a third of global sales of luxury products,” Reuters reported.

Travel from China to the U.S. fell 5.7 percent in 2018 to 2.9 million visitors. Tourist-related sales in the U.S. decreased by about 25 percent versus a year ago. On Tuesday, China issued a travel warning for the U.S. claiming the high frequency of shootings, robberies, and theft in the country makes it dangerous to visit. The warning comes amid a trade war between China and the U.S.

CEO Alessandro Bogliolo said the brand wasn't experiencing any "negative sentiment" from Chinese shoppers here or in China amid the escalating trade fight.

Revenue slid 3 percent to $1 billion, just shy of Wall Street expectations, according to a survey by Zacks Investment Research. The luxury jewelry company posted a profit of $125.2 million, or $1.03, which is 2 cents better than Wall Street expected.

Sales at established stores worldwide declined 5 percent; on a constant-exchange-rate basis, both total net sales and comparable sales declined 4 percent.

In Asia-Pacific, total net sales declined 1 percent and comparable sales declined 5 percent due to the effect of foreign currency translation. There was continued strong growth in mainland China, but mixed results in other markets.

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The company said per-share net earnings should increase by a low-to-mid-single-digit percentage, citing increased tariffs on jewelry it exports to China. It had projected a mid-single digit percentage increase. The company said it has not planned on raising retail prices in China yet. Shares of Tiffany rose nearly 3 percent.

The Associated Press contributed to this report.

TickerSecurityLastChangeChange %
TIFTIFFANY & CO133.49-0.06-0.04%