(Reuters) - Tiffany & Co TIF.N tempered its yearly profit forecast on Friday after the luxury jeweler's holiday sales fell unexpectedly as Chinese tourists spent less globally due to a stronger dollar and demand softened in Europe and at home.

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Like other luxury goods firms, Tiffany relies on spending by China’s burgeoning middle class as consumer demand remains subdued in the United States and Europe, weighed down at the moment by uncertainties such as a partial U.S. government shutdown and Britain’s plan to exit the European Union.

During the crucial November-December period, Tiffany’s worldwide same-store sales fell 2 percent while net sales dipped 1 percent, against its expectations of modest increases.

Tiffany Chief Executive Alessandro Bogliolo blamed softer spending globally by foreign tourists, primarily Chinese, and “a lot of uncertainties and volatility” which may have hit customer demand in Europe and the Americas.

“We see Chinese tourists spending abroad going down heavily, minus 20-25, 30-35 percent, and this is in many, many countries ... in the U.S., but it’s also Hong Kong and now it’s spreading to Southeast Asia,” Bogliolo told Reuters. “For sure it’s due to the exchange rate.”

Shares of Tiffany, which have fallen 22 percent in the past 12 months, were up 3 percent in morning trade.

“Tourism is the culprit for TIF’s underwhelming holiday numbers, but this is not a surprise to us given the stronger dollar,” Jefferies analyst Randal Konik said.

Bogliolo also said issues such as Brexit, protests in France and the U.S. shutdown, now in its 28th day, “makes me more cautious” about sales and earnings forecasts, but he expects a couple of “very tough” quarters.

A slowdown in spending by Chinese tourists prompted Tiffany to shy away from raising its yearly profit targets in November. On Friday, it said it expects full-year earnings for fiscal 2018 around the lower end of its estimated range of between $4.65 and $4.80 per share.

Still, customer demand at Tiffany stores in mainland China remained strong during the holiday season, the company said.

Consumer Edge Research’s David Schick said that strength “supports the view of continued brand relevance, which is important to the long-term story.”

The New York-based jeweler's holiday period results mirror similar reports from other U.S. retailers. Macy's M.N, Kohls KSS.N and others reported disappointing results even as overall shopping during the 2018 U.S. holiday season reached a six-year high.

Smaller U.S.-based jeweler Signet SIG.N on Thursday reported lower holiday period sales and slashed its full-year profit forecast, driving its shares more than 20 percent lower.

Tiffany, known for its engagement rings and robin’s egg blue boxes, said holiday sales of engagement and designer jewelry fell 3 percent and 8 percent, respectively.

Annual sales should rise 6 to 7 percent, the company said. It had earlier estimated growth in the high single percentage digits.

For the year ending January 2020, Tiffany expects earnings per share to rise in the mid-single digits and net sales to grow in low-single digits.