Upscale jeweler Tiffany's quarterly sales fell for the first time in five years, and will likely fall further, hurt by the strong dollar. Bobbi Rebell reports.
Upscale jeweler Tiffany reporting its first quarterly sales drop in half a decade- the strong dollar hitting it where it hurts: Sterne Agee's Ike Boruchow: SOUNDBITE: IKE BORUCHOW, MANAGING DIRECTOR, STERNE AGEE (ENGLISH) SAYING: "Not only is half the business outside the U.S., you know 20, 25% is Japan, 15% is Europe, and the translation hits them there. But remember 25% of the U.S., about 40% of the U.S. flagship here in NY is driven by foreign tourists. So when you have those FX swings, and the dollar gets stronger and stronger it impacts that part of the business. So, I think that has a large part to do with why you are seeing the U.S. business slow." Tiffany added to its earlier warning - saying sales for the current quarter would be down 10 percent, and profits down 30 percent. Boruchow cut his price target on the stock to $91 from $110. But he is maintaining a buy rating, saying the company is doing well with what it can control: SOUNDBITE: IKE BORUCHOW, MANAGING DIRECTOR, STERNE AGEE (ENGLISH) SAYING: They have done a great job the last 9 or 12 months of making some key hires within the north america business. working on blocking and tackling at the store level. just remerchandising the stores. training the associates a little better." And also innovating with new styles. Tiffany's new T line, aimed at affluent buyers, treating themselves- is doing extremely well. But that sparkle won't be enough to offset the mighty dollar, which Tiffany says will also hurt revenue and profit next year.