Tiffany cuts 2012 outlook

 

US jeweller Tiffany today cut its fiscal-year sales and profit forecasts for the second straight quarter, citing the tough global economy, weakness in key markets such as New York and Asia, and lower expectations for the holiday season.

The jeweller lowered its full-year profit outlook to between $3.55 and $3.70 a share from $3.70 to $3.80.

But the reduction appeared to be no worse than what analysts had been bracing for, coming in line with Wall Street expectations of $3.64.

Shares of the company were up 6.4 per cent at $62.25 in premarket trading.

Chief executive officer Michael Kowalski said in a statement that it was necessary to give a "prudent" forecast given the uncertainty slamming the world economy and its impact on consumer spending.

Global sales at Tiffany rose 1.6 per cent to $886.6 million in the second quarter ended on July 31.

Sales at stores open at least a year fell 1 per cent, excluding the impact of currency fluctuations. Same-store sales dropped 5 per cent in the Americas and in the Asia Pacific, which includes China, which has been the fastest-growing market for Western luxury brands.

Sales in Europe only got a boost because of exchange rates favourable to Tiffany.

Sales at the chain's famous Fifth Avenue flagship, a favourite of the millions of international tourists in New York, fell 9 per cent. That location generates almost 10 per cent of revenue.

Reuters