The going has been tough for many companies as the overall business environment has been tough in recent times. Tiffany & Co is no exception.
The premier jeweler warned that its sales are not rising as fast as expected. The company is witnessing a slowdown not only in the domestic market, but also in European markets.
Americas Region Sluggish
The company registered robust growth in the Asia-Pacific region where sales rose 17 percent. The sales also grew 15 percent in Japan. In contrast, sales in the Americas region as well as in Europe rose by a mere 3 percent.
“In terms of our sales for the first quarter, regions outside the Americas performed generally as expected. However, the Americas region underperformed, continuing a soft trend that began in the last quarter of 2011 and compounded by the difficult comparison to substantial growth in last year’s first quarter,” Chairman and CEO Michael J. Kowalski said.
“These sales results led to net earnings modestly trailing our expectations,” Kowalski added.
In view of the lukewarm first quarter results, Tiffany slashed its growth forecasts for worldwide net sales by 200 to 300 basis points. The earlier forecast was that global sales would increase 10 per cent in 2012 vis-à-vis 2011 sales. The company is revising its annual forecast to incorporate the disappointing first quarter’s results.
Founded in 1837, Tiffany & Co. has been the considered as the America's house of design. The company is well-known for selling luxury goods like, especially diamond jewelry. An arbiter of taste and style, Tiffany caters to the premium segment of the society.
Sales of Tiffany were badly hit during the latest recession of 2009. The customers had slowly but surely started loosing their purse string before the concerns about Greece and debt crisis in Euro zone gave another jolt to the New York City based jeweler.
Another challenge for Tiffany is that its rivals have slashed down prices. On the contrary, Tiffany has had to increase the prices due to surging silver costs.