What: Jewelry retailer Tiffany & Co.(NYSE:TIF) saw its stock sink 29% lower in 2015, according to S&P Capital IQ data.

TIF Chart

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The drop marked the first down year for Tiffany shareholders since 2012. The stock rose sharply in 2013 and 2014 before pulling back last year.

So what: Tiffany's falling stock price can be tied to its steadily worsening profit outlook. Management began fiscal year 2015, which kicked off on Feb. 1, 2015, expecting to earn $4.20 per share. And while that was a disappointing forecast for investors as it represented no growth over the prior year period, it's a result that Tiffany would love to have at this point. Since providing initial guidance in March, executives have dialed back their full-year profit expectations several times. Tiffany's latest outlook calls for earnings as low as $3.78 per share, or 10% below the previous year.

The retailer's global sales posture exposed it to shrinking revenue as foreign currencies moved lower against the U.S. dollar. In the nine months ended October 31, in fact, reported sales shrank by 2% while the currency-neutral results would have showed a 4% increase. In addition, weaker international currencies have hurt Tiffany's tourist business in the U.S. Its flagship store in New York City is suffering as foreign visitors' purchasing power declines. 

The good news is that Tiffany's profitability has held steady, which is a testament to the strength of its brand. Gross profit margin rose to 60.2% last quarter from 59.5% in the prior year period. Compare that to online rival Blue Nile's 19%.

Now what: CEO Frederic Cumenal and his management team aren't expecting the industry headwinds that crimped results last year to disappear any time soon. "We believe that volatile, uncertain economic and market conditions in the U.S. and other regions are affecting consumer spending," he told investors in November. This tepid consumer behavior convinced executives to "maintain a cautious near-term outlook," he said.

Source: Tiffany

Yet Tiffany is optimistic about the long-term.

The company's global store expansion initiative is proceeding as planned. And while they hope the industry will start growing again soon, in the meantime, management is focused on delivering jewelry innovations, cost management, and marketing investments that set the stage for an eventual recovery from 2015's disappointing results.