GOLDMAN SACHS: Tiffany & Co To Get Slammed By The Crisis In Japan

tiffanys jewelry pearls

Photo: Ali_ayers via Flickr

Tiffany & Co., the American luxury retailer, will have to propose a more conservative outlook in the wake of the disaster in Japan, according to Goldman Sachs analyst Adrianne Shapira.Shapira says the events in Japan will endanger Tiffany’s sales in Japan, which make up 18% of the company’s total sales and 25% of its profits.

The high-end jeweler has the fourth-highest exposure to Japan out of companies on the S&P 500, according to Bank of America Merrill Lynch.

Tiffany & Co. was previously thought to be in good shape, as the company has an advantage in passing on commodity price inflation to consumers. The events in Japan may have dented that positivity. 

From Goldman’s Adrianne Shapira (emphasis ours):

Japan’s performance had been lagging the rest of the world’s sales recovery over the past several quarters as it was delivering mid- to high-single-digit comp declines; however, this past holiday season, Japan was on track to deliver a positive low-single-digit comp in local currency, the first since 2006. The recent events have derailed this progress, and we expect management to recast the region’s outlook, given the direct exposure and the additional effect of softer tourist sales.

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