Tiffany cuts outlook, so what?

Published on January 11, 2008

Tiffany cuts outlook, so what?

January 11, 2008

Tiffany (TIF) cut its fiscal-year earnings outlook as same-store sales fell 2 percent in the United States during the November-December holiday period. U.S. Retail sales increased 4% to $449,080,000, as increased spending per transaction was partly offset by a decline in the number of transactions.

Tiffany now expects net earnings of $2.40 to $2.43 per share for the year ending on January 31. In November, it had forecast profit of $2.49 to $2.54. Tiffany also reduced its full-year sales growth forecast by to 14 percent from 15 percent.

Need more proof that consumer is tightening the purse strings? Probably the rich is spending more, but less number of rich are spending. Do you smell trouble ahead for the luxury goods makers (Jewelry, RVs, Harley’s and many more)? But do analyze their exposure to international markets for two reasons-a) Currency exposure and b) Rise in purchasing power and hence growth.

Of course one thing is shining, the shining metal called “Gold” but the one without “fat margins”.

Profitable “luxury” selling, OP

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