What happened

Luxury jewelry giant Tiffany (NYSE:TIF) underperformed a weak market last month as the stock lost 17% compared to a 7% decline in the S&P 500, according to data provided by S&P Global Market Intelligence.

The drop has left shareholders simply matching the broader market's return so far in 2019 while the stock had been up by as much as 36%.

A woman wearing diamond jewelry.

Image source: Getty Images.

So what

May's decline was driven by investor fears that Tiffany might announce weaker sales and profit figures as a result of the growing trade war between the U.S. and China. The company largely met those expectations in early June when management revealed flat global sales and tumbling gross profit margin in the fiscal first quarter.

Now what

Tiffany is being hurt by lower spending on the part of Chinese tourists in key cities around the world, and there's no telling when that trend will reverse. However, executives believe they'll still manage modest sales growth in 2019 and a slight profitability increase.

These gains won't start showing up until the second half of the year, though, and so investors will have to be patient as they wait for signs that the business is actually rebounding.

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