New York City Tiffany & Co. Wednesday slashed its full-year forecast and said it plans to cut staff and moderate its 2009 store-expansion plans. The moves are the latest signs that troubled U.S. economy is hurting affluent consumers.
"It is impossible to know when consumer confidence will be restored," chairman and chief executive Michael Kowalski said in a statement.
In addition to cutting staff, Tiffany will trim capital expenditures and pursue cost-cutting efforts including a slowdown in new store openings in 2009.
”We are still in the early stages of formulating our financial plans for 2009 but I can say that we will look for opportunities to increase market share, while simultaneously pursuing various cost-reduction avenues appropriate for this environment, including a moderation in the rate of new store openings in 2009,” Kowalski said.
In a conference call with investors, CFO James Fernandez said the retailer plans a store growth rate of 5% to 6% in 2009, against its long-term plan for an 8% to 10%, Reuters reported.
Tiffany's net profit fell to $43.8 million in the third quarter ended Oct. 31, from $101.5 million a year earlier.
Worldwide sales fell 1% to $618.2 million in the quarter, while same-store sales declined 7%. Same-store U.S. sales fell 14%, offsetting better sales in new stores and growth in Canada and Latin America.
Sales in Tiffany’s New York flagship store, which has posted strong gains in past quarters due to tourist spending, fell 5%.
Sales in the Asia-Pacific region rose 3%, and were up 16% in Europe.