The upscale retailer sees profit this year falling sharply due to the strong dollar. But some analysts voice cautious optimism over its prospects. Fred Katayama reports.
No holiday sparkle in store at Tiffany. The upscale jeweler warning that profit this year will fall by up to 10 percent. Foreign tourists in the U.S. are curbing spending at its stores because of the mighty dollar. The currency is also translating into smaller sales at its overseas stores. In addition, Tiffany blamed what it called "uncertain economic and market conditions" domestically and abroad for its cautious outlook. In its latest quarter, profit rose but worldwide comparable sales fell, especially in the Americas. But they rose sharply in Japan, thanks to strong sales to foreign tourists there. Tiffany shares, which are down 28 percent this year, fell further in early trading. Stifel Nicholas analyst David Schick thinks this is a buying opportunity, saying, "While there are softer results and lower guidance here ... this is not about the Tiffany brand, and so we see a negative reaction today as a cyclical pressure of which long-term investors should take advantage." Cowen analyst Oliver Chen also voiced cautious optimism, saying the headwinds are "external and temporary."