Updated from 5 p.m. EST Sunday with stock price
After less than two years on the job, Tiffany (TIF) - Get Tiffany & Co. Report CEO Frederic Cumenal will step down effective immediately, but the jewelry retailer said it still expects to report financial results in line with its previous forecasts.
Tiffany announced Sunday that it had engaged an executive search firm to find a new CEO. In the meantime, former CEO Michael J. Kowalski will serve as interim CEO in addition to his role as chairman of the board.
Shares were falling 6.80% to $75 in pre-market trading on Monday.
"The Board is committed to our current core business strategies, but has been disappointed by recent financial results," Kowalski said in a statement.
Tiffany also reaffirmed its fiscal 2016 guidance, which it outlined in a Jan. 17 press release announcing its holiday sales. The company expects its earnings per diluted share and net sales to fall to mid-single digit percentage points. Tiffany also forecast cash from operating activities of $575 million and free cash flow of $125 million.
Analysts polled by FactSet expect earnings of $3.67 per share on revenues of $3.99 billion, down 9.7% and 6% year-over-year, respectively.
Holiday sales, during the two months ending Dec. 31, fell 4% year-over-year in the Americas, with a 14% decline at the flagship Tiffany store on Fifth Avenue. "Post-election traffic disruptions" caused part of the flagship store's declines, the company said. The Tiffany store is located next to Trump Tower, where Donald Trump lived as President-elect and his wife and son still live. Protests, media presence and security disrupted retail sales and traffic on the block.
Although Jefferies analyst Randal Konik estimated that the flagship store accounted for more than 10% of Tiffany's sales, with tourists accounting for 40% of sales at the flagship store, he wrote that the disruption was not as bad as expected and will improve over time.
Cumenal's departure is the second of a chief executive of a luxury brand. Ralph Lauren (RL) - Get Ralph Lauren Corporation Class A Report CEO Stefan Larsson also stepped down, saying on a Thursday call with analysts that he had clashed with founder Ralph Lauren, who is the company's executive chairman, chief creative officer and largest shareholder.
Cumenal joined Tiffany in 2011 as executive vice president, was appointed president in 2013 and CEO in April 2015. Prior to Tiffany, he served as president and CEO of LVMH's Moet & Chandon champagne brand after stints at Procter & Gamble (PG) - Get Procter & Gamble Company Report , Italian conglomerate Ferruzzi Group and privately held American candy giant Mars.
Tiffany will report its fourth-quarter and full-year earnings on March 17.
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