The strong dollar hurt the luxury retailer's sales in the U.S. and key overseas markets like Hong Kong. Bobbi Rebell reports.
Tiffany's sales dropped 7 percent, the its biggest quarterly decline since the peak of the global financial crisis. The key issue: the strong dollar discouraged tourists visiting the U.S. from buying the company's high-end jewelry. About half of Tiffany's revenue comes from the America's region. The strong dollar also hurt revenue overseas. Europe and Asia, especially Hong Kong, were hard hit. Thomson Reuters Director of Consumer Research Jharrone Martis: (SOUNDBITE) JHARONNE MARTIS, DIRECTOR OF CONSUMER RESEARCH, THOMSON REUTERS, (ENGLISH) SAYING: "A lot of the luxury names like Burberry and Kering, the parent company of Gucci are mentioning in their earnings call that Macau and Hong Kong are really a spot of weakness, and this is very concerning because I think the market is underestimating the big hit that these luxury retailers are taking because of the weakness in Hong Kong. This used to be the jetsetter spot where wealthy shoppers used to flock." Martis adds that retailers like Tiffany still have to pay the sky high rents in cities like Hong Kong. The bright spot in the quarter: Japan. Same-store sales rising 12 percent, in part because the yen strengthened against the dollar.