UPDATE 1-Tiffany cuts outlook after Dutch court ruling
By Silke Koltrowitz and Ryan Vlastelica
ZURICH Dec 22 (Reuters) - Tiffany & Co on Sunday cut its full-year outlook following a Dutch court ruling that it must pay Swatch Group 402 million Swiss francs ($448.79 million) in damages.
The ruling came in a lawsuit following the end of a collaboration between the two groups. The Netherlands Arbitration Institute sentenced Tiffany to pay Swatch damages after it pressed claims against the U.S. jeweller in December 2011, the world's largest watchmaker said in a statement on Sunday.
Tiffany's said it would record a fourth-quarter charge of $295 million to $305 million as a result of the ruling. It lowered its full-year earnings outlook range to $2.30 a share to $2.35 a share from a previous estimate of $3.65 a share to $3.75 a share.
Michael Kowalski, the chief executive of the luxury retailer, said in a statement that he was "shocked and extremely disappointed" with the court ruling and that the company was reviewing its options.
Tiffany's said it would fund the award from immediately available cash on hand and funds from existing debt facilities, and that it didn't expect the ruling to impact its short or long-term business plans.
Swatch said the court had integrally dismissed a counter-claim filed by Tiffany in March 2012.
Swatch and Tiffany had struck an agreement to develop watches under the Tiffany brand together in 2008, but Swatch terminated the partnership in 2011, blaming Tiffany for blocking and delaying development of the business.
Shares of Tiffany's closed Friday at $90.62.
- Lightning, rain fail to deter resolute Hong Kong protesters |
- Kurds seize Iraq/Syria border post; Sunni tribe joins fight against Islamic State |
- Special Report: Islamic State uses grain to tighten grip in Iraq
- Protesters stay out on Hong Kong streets, defying Beijing |
- EBay follows Icahn's advice, plans PayPal spinoff in 2015 |