Earnings Preview: Tiffany to offer holiday clues

Tiffany's 3Q expected to show cautious consumer amid economic challenges here and abroad

Associated Press

NEW YORK (AP) -- Jeweler Tiffany & Co. is scheduled to report its third-quarter earnings before the market opens Thursday, which should offer insight into early holiday spending amid economic challenges both here and abroad.

WHAT TO WATCH FOR: Analysts will be looking closely at what type of jewelry Tiffany's affluent customers are buying and whether they're scaling back even more since this past summer. The holiday quarter accounted for nearly a third of Tiffany's revenue last year.

Analysts will also want to know how shoppers are reacting to continued rising prices of baubles, given increasing costs of silver, gold and platinum.

The affluent had been spending more since the Great Recession officially ended in mid-2009, recovering faster than other people. But starting late last year, Tiffany's customers trimmed their spending on jewelry amid stock market volatility and growing worry about the debt crisis in Europe.

Specifically, analysts will want to know how busy Tiffany's New York flagship store is and details on sales in Europe, Japan and China.

In August, Tiffany lowered its profit outlook amid growing caution among its clientele. At the time, it said it expected 2012 earnings of $3.55 to $3.70 per share, down from $3.70 to $3.80 per share.

Still, Tiffany is planning stores in new cities. It now plans to open 28 company-operated stores this year compared with the previously planned 24.

WHY IT MATTERS: Tiffany is a bellwether for the luxury market, so if the company sees that shoppers are becoming more cautious, that has consequences for the broader economy.

WHAT'S EXPECTED: Analysts expect earnings of 63 cents per share on revenue of $858.8 million, according FactSet.

LAST YEAR'S QUARTER: The company reported net income of 70 cents per share on revenue of $821.9 million.

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