Tiffany's tarnished earnings report

When it comes to spending, the rich aren't so different.

By Jonathan Berr Jan 10, 2012 11:06AM
Image Source/CorbisShares of Tiffany & Co. (TIF) are slumping this morning after the luxury retailer reported weaker-than-expected holiday sales. This is further evidence that the economic recovery may be starting to falter.

Tiffany reported that holiday revenue rose 7% to $952 million, fueled by double-digit gains in Asia along with smaller increases in Europe and the Americas. Same-store sales rose 4%, the New York-based company said.

"After achieving very strong and better-than-expected sales and earnings growth in the first three quarters of 2011, sales weakened markedly in the United States and Europe during the holiday season, reflecting restrained spending by consumers for fine jewelry,"  CEO Michael J. Kowalski said in a press release.

The company estimates earnings for the fiscal year ending January 31 will be $3.60 - $3.65 per share versus an earlier forecast $3.70 - $3.80 per share. This still surpasses a forecast made last March of $3.35 - $3.45 per share. Wall Street analysts expected earnings for the current fiscal year of $3.76 on revenue of $3.68 billion.

Weakness in spending by U.S. customers were offset by higher sales to tourists from outside the U.S. Internet and catalog sales in the Americas were 4% lower than last year. Sales in Europe increased 1% to $117 million, though same-store sales in the region fell 4%. Comparable sales in the Americas rose 2%.

"You are seeing more volatility in the financial markets," said Stifel Nicolaus & Co analyst David Schick in an interview with Bloomberg News. "It’s not confidence-inspiring for bigger-ticket spending. That tells you not to expect too much in the top line for Tiffany."

Tiffany joins Target (TGT), Kohl's (KSS) and J.C. Penney (JCP) in reporting that the holidays were less merry than many had expected despite heavy discounting. These companies all lowered their fourth quarter earnings outlooks, underscoring that both wealthy and middle class consumers remain uneasy about their financial futures though they are increasingly willing to tap their credit cards.

Jonathan Berr is a freelance business writer. He owns shares of Target.
Tags: TIF
0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

123
123 rated 1
262
262 rated 2
480
480 rated 3
651
651 rated 4
649
649 rated 5
629
629 rated 6
616
616 rated 7
496
496 rated 8
346
346 rated 9
111
111 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
EXCEXELON CORPORATION9
TAT&T Inc9
VZVERIZON COMMUNICATIONS8
CTLCENTURYLINK Inc8
AAPLAPPLE Inc10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.