By Yashaswini Swamynathan
(Reuters) - Upscale jeweler Tiffany & Co's (N:TIF) quarterly sales fell for the first time in five years and are expected to decline further in the current quarter, hurt by the strong dollar.
Shares of the No. 1 U.S. jeweler fell 3 percent before the bell on Friday.
Tiffany posted a surprise 1 percent fall in sales in the fourth quarter ended Jan. 31 and said sales are expected to fall 10 percent in the quarter ending April.
The company expects profit to drop 30 percent in the current quarter, fall more modestly in the second, before recovering in the next two quarters to end up with "minimal growth" in full-year profit compared with the $4.20 per share it earned in the year ended Jan. 31.
Edward Jones analyst Brian Yarbrough, however, doubted Tiffany's ability to meet those targets saying the company was yet to explain their confidence in business rebounding enough in the third and fourth quarters.
New York-based Tiffany in January had warned the stronger dollar would not only reduced the value of sales outside the United States, but also hurt sales to tourists in the country.
The dollar had risen about 9 percent against a basket of major currencies from November to January and a majority of analysts polled by Reuters were 'confident' the rally would continue mostly unabated through this year.
That is expected to lead to a slowdown in spending by tourists and will also reduce the value of Tiffany's international sales, which account for roughly half of total sales.
Tourists have historically accounted for a quarter of Tiffany's U.S. sales, and for more than 40 percent of sales in its flagship store in Fifth Avenue, Manhattan.
The company's fourth-quarter revenue slipped to $1.29 billion from $1.30 billion, while analysts were expecting it to rise to $1.31 billion, according to Thomson Reuters I/B/E/S.
Tiffany reported net income of $196.2 million, or $1.51 per share, in line with analysts' average estimate.
It posted a loss of $103.6 million, or 81 cents per share, a year earlier due to a legal charge.
Tiffany's shares closed at $86.37 on Thursday, down nearly 3 percent since the company cut its profit forecast in January.