There was no bling in Tiffany’s holiday ales. The company announced on Tuesday that sales slumped 5% at stores open at least a year, due mostly to the strong US dollar that scared away tourists.
The company downgraded its 2015 profit outlook and moved to cut costs by slashing jobs.
The poor sales mark the first time since the Great Recession that Tiffany has been forced to cut jobs, according to Wells Fargo.
Tiffany says the cuts will focus on a “range” of functions and will be announced later this month. The company has not revealed how many people will be fired.
“It’s good they’re doing this, but it’s also a little concerning. Is this a sign they think this sales instability is going to continue? Maybe. It doesn’t exactly give you confidence,” said Ike Boruchow, an analyst who covers Tiffany at Wells Fargo.
The company’s stock dropped by 5% on Tuesday. It’s down 15% on the year.
Tiffany blamed its poor sales figures on “challenging and uncertain global economic conditions.”
The company cited “weak tourist spending” in New York and some other markets as visitors to the US purchased less jewelry and foreign visitors avoiding higher costs caused by the US exchange rate.
Nearly 25% of Tiffany sales are from foreign tourists who shop at its flagship store on Fifth Avenue.
The company’s international stores didn’t translate well either as profits converted back into US dollars were lower than normal.