Tiffany & Co. reporting its results recently, for the 12 months (full year) and three months (fourth quarter) ended January 31, 2016, said that its sales and earnings had both been “negatively affected by the strong U.S. dollar”.  While full year sales rose 2% in local currencies, they declined 3% as reported (Tiffany reports results in US dollars) to US$ 4.1 billion.

“Throughout the year, results were pressured by the strong U.S. dollar, which had a negative effect on the translation of non-U.S. sales into dollars and on foreign tourist spending in the U.S., as well as, to varying degrees, the effects of macro-economic challenges and uncertainties on consumer spending,” Tiffany said in a press note.

The 2% rise of worldwide net sales for the year, on a constant-exchange-rate basis, was a result of higher sales in Asia-Pacific, Japan and Europe, the Company said, while  comparable store sales were equal to the prior year. 

Tiffany’s net earnings for the full year stood at US$ 493.8 million, or US$ 3.83 per diluted share (“excluding pre-tax charges of US $37.9 million for two impairments of a loan made to a diamond mining company and US$ 8.8 million for staffing and occupancy reductions”) and were 9% lower than last year's net earnings of US$ 545.1 million, or $4.20 per diluted share (“which had excluded a debt extinguishment charge”).  The Company attributed this to “lower sales and higher selling, general and administrative (SG&A) expenses partly offset by a higher gross margin”.

The Company said that “On a reported basis, which included the charges in both years, net earnings per diluted share of US$ 3.59 were 4% below the prior year.”

For the fourth quarter - on a constant-exchange-rate basis -- worldwide net sales declined 2%, “reflecting lower sales in the Americas and Asia-Pacific and sales growth in Japan and Europe” and comparable store sales decline of 5%, Tiffany announced. Reported in U.S. dollars, worldwide net sales at $1.2 billion for Q4 were 6% lower than those in the same period of the previous year.

Net earnings for Q4 amounted to US$ 186.8 million, or US$ 1.46 per diluted share (“excluding pre-tax charges of US$ 28.3 million for impairment of a loan made to a diamond mining company and US$ 8.8 million for staffing and occupancy reductions”) marking a decline from US$ 196.2 million, or US$ 1.51 per diluted share in the same period of the previous  year.  “The decline reflected a lack of sales leverage on higher selling, general and administrative expenses partly offset by a higher gross margin,” the Company said. “On a reported basis, net earnings were US$ 1.28 per diluted share.”

Frederic Cumenal, chief executive officer, said, "We faced various challenges during the year that negatively affected our financial results, especially related to the strong U.S. dollar. However, our management team continued to pursue initiatives to strengthen Tiffany's abilities to serve our clientele effectively and deliver extraordinary products and experiences.”

He added, looking to the future: “We are focused on returning to stronger financial performance, at sustainable rates, which we believe is achievable as we execute on our strategic initiatives and as challenging external conditions abate. Therefore, our longer-term objective calls for reaching high-single-digit net earnings growth, driven by mid-single-digit worldwide net sales growth on a constant-exchange-rate basis, while also continuing to generate strong free cash flow.”