When it comes to luxurious bracelets, necklaces and other designer pieces of gems and precious metals, Tiffany & Co. (NASDAQ:TIF) is considered to be the most popular boutique for the same. It is located in New York, US. The company has already issued a warning to its investors making them aware of the minimum growth in the next 12 months.
This is the first time in five years that the sales of Tiffany are dropped so low. The decline that is expected in the first quarter net earnings is as high as 30 percent. This is alarming for the company as well as its investors. However, in the third and the fourth quarter, the net earnings will increase by double digit percentage.
Shares of the company have gone down to $83.00, which is basically the lowest intraday price since March 10. It was being traded in New York at $83.37. The stocks of the company have come down to 22 percent in this year.
The reason behind the downfall of the company is the strong rate of dollar. The foreign tourist spending in the US is affected due to it and hence, the value of the company sales overseas has suffered. According to the president of Tiffany and CO Frederick Cumenal, “By now it should be clear that Tiffany is facing challenges from global economic uncertainties, especially from the effect of a strong US dollar on the translation of foreign-denominated sales into dollars and on foreign tourist spending in the US.”
He also mentioned, “As a result, we have adopted a cautious approach in our planning for the coming year, anticipating modest growth in net sales and minimal net earnings growth for the full year; this assumes pressure on sales and earnings in the first half of the year followed by healthy growth in the second half.”
The plans of the company for 2015 call for the addition of 12-15 company operated stores in the majority of regions. The introduction of new jewelry and watch designs is also part of the company’s 2015 plan. The new CT-60 watch collection is also due to be introduced the next month. The company will continue to invest more in the new systems and will try to deliver the best in-store experience in order to derive better sales in the coming time.