Tiffany & Co. reported better-than-expected fourth-quarter earnings on Friday but warned profits would fall in the first half of 2016 due, in part, to a further strengthening of the dollar.

The luxury goods company reported adjusted diluted earnings of $1.46 per share on revenues of $1.2 billion for the quarter ended Jan. 31. Analysts polled by Thomson Reuters had forecast $1.40 in profit on $1.21 billion in sales.

But on a constant-exchange-rate basis, worldwide net sales declined 2% and comparable store sales declined 5%. Reported in U.S. dollars, worldwide sales were down 6%.

“We faced various challenges during the year that negatively affected our financial results, especially related to the strong U.S. dollar,” CEO Frédéric Cumenal said in a news release.

As Fortune reports, the strong U.S. dollar “has been wreaking havoc with Tiffany and many of its luxury peers for several quarters. That has meant foreign profits translating into fewer American dollars, but also that tourists coming to the U.S., where Tiffany got nearly half its $4.1 billion in sales last year, have cut back on spending while on vacation.”

Tiffany isn’t expecting much relief in the first half of 2016. It forecast earnings per share would fall 15% to 20% in the first quarter, and then 5% to 10% in the crucial second quarter, which includes Mother’s Day and the bridal season.

For the full year, the company expects earnings would either remain flat or fall in the mid-single digits from 2015’s $3.83 per share.

“We are assuming that sales and earnings growth in 2016 will continue to be pressured by various factors including a further strengthening of the dollar, along with volatile and uncertain economic and equity market conditions that will likely affect consumer spending,” Cumenal said.

In trading Friday, Tiffany stock were up more than 2% at $71.67. “Analysts fear [Tiffany’s] numbers, as well as those from other luxury retailers, could represent an overall sluggishness in a sector that has traditionally weathered economic anomalies well,” Seeking Alpha said.

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