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By Bloomberg

Tiffany & Co., the luxury jewelry retailer, reported a 1 percent decline in holiday sales and lowered its annual forecast, hurt by a slump in Japan, currency fluctuations and a slowdown in its home market.

Sales in November and December fell to $1.02 billion worldwide, the New York-based company said today in a statement. That was slower than the 4 percent gain in the period a year earlier. The gloomy report sent the shares down as much as 7.2 percent in early trading.

Tiffany had been counting on the Americas to help offset sluggish results overseas, especially in Japan. That approach faltered over the holidays, when sales in its home region fell 1 percent to $544 million, compared with an increase of 6 percent a year earlier. A stronger dollar, meanwhile, ate into international sales, turning 9 percent growth in Europe into a 1 percent gain when converted into U.S. currency.

“Clearly, sales for the holiday period were disappointing, with significant variability in performance by region and by product category,” Chief Executive Officer Michael Kowalski said in the statement. “Sales in the Americas declined slightly after a very strong start to the year.”

The shares fell as low as $96 in premarket trading. The stock had gained 15 percent last year.

Earnings Forecast

Currency challenges will continue to weigh on the company’s results, Tiffany said. The retailer now expects earnings for the year ending Jan. 31 to be $4.15 to $4.20 a share, compared with a prior forecast of $4.20 to $4.30.

“While we are still in our planning process, we believe these factors will likely result in our planning low- to mid- single-digit sales and earnings growth in 2015,” Kowalski said.

The results also underscore Japan’s dimming status as a luxury market. The country’s sales in U.S. dollars declined 16 percent to $113 million. The rest of the Asia-Pacific region fared better, growing 7 percent to $210 million on that basis.

Of Tiffany’s almost 300 company-operated stores, 123 are in the Americas, with 73 in the Asia-Pacific region, 56 in Japan and 38 in Europe. The company added 10 stores in 2014, including on in Russia.