- The Washington Times - Thursday, March 19, 2009

NEW YORK (AP) - Jeweler Tiffany & Co. reports earnings for the fourth quarter on Monday before the market opens. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Like many other luxury companies, Tiffany has seen sales slide as Americans cut back on big-ticket purchases.

During the crucial holiday season, Tiffany’s same-store sales dropped 24 percent because of soft sales at U.S. stores. Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.

Tiffany warned this would drag down fourth-quarter earnings, which Tiffany expects will decline from a year ago. Tiffany blamed soft same-store sales on weak consumer spending and cautioned that the spending environment will likely stay the same for most of 2009.

Chairman and Chief Executive Michael Kowalski said because the holiday season represented the largest portion of fourth-quarter sales, it remained unlikely that sales would pick up for the quarter that ended at the end of January.

Earlier this month, Tiffany said it will close its unprofitable Iridesse pearl jewelry chain, partly because of economic weakness that hindered demand for jewelry. The chain wasn’t able to turn a profit since opening in 2004.

EXPECTATIONS: Analysts polled by Thomson Reuters expect earnings of 80 cents per share and sales of $838 million.

ANALYST TAKE: Stifel Nicolaus & Co. analyst David Schick, who rates the stock “Hold,” expects Tiffany’s sales to remain pressured by a drop in discretionary spending and unemployment.

Schick expects Tiffany will scale back on new store openings, but doesn’t think Tiffany will “radically change” its business model, despite a tough economy.

Schick still expects Tiffany will roll out new jewelry lines in fiscal 2009 and beyond to “keep customers excited, if not shopping.”

WHAT’S AHEAD: Analysts and investors will continue to monitor consumer spending and international travel, as Tiffany records a large portion of sales at its flagship location in midtown Manhattan _ a popular tourist site.

STOCK PERFORMANCE: So far this year, shares of Tiffany have declined 14.3 percent. During the quarter, the stock declined 24.4 percent.

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