Philip Diehl appointed President!
For those who don't know him, he is the guy that transformed the U.S. Mint into a marketing machine with an excellent web site. He will play well on Wall Street. Ingore yesterday's news:
Zale, Tiffany stocks fall on interest rate fears
By Lila LaHood
Star-Telegram Staff Writer
Stocks of Zale Corp. and Tiffany & Co. faltered yesterday after
a Merrill Lynch & Co. analyst said rising interest rates could
affect jewelry sales this year.
Mark Friedman, an analyst in New York, revised his
intermediate-term ratings from "buy" to "accumulate" for both
companies.
"While sales and earnings momentum at both companies remain
strong," Friedman wrote in a report, "aggressive share
appreciation may be more difficult to achieve in light of rising
interest rates and investor concern of slowing consumer
spending."
Irving-based Zale's stock fell $3.75 yesterday to close at
$46.1875; Tiffany's fell $3.4375 to close at $71.875.
Friedman maintained long-term "buy " ratings on both stocks.
Other analysts said they expect interest rates to have little
effect on jewelry sales in the near term.
"The reality is that interest rates have been going up the last
nine months and Zale's sales have been going off the charts,"
said Steven Kernkraut, an analyst with the Bear, Stearns
investment firm in New York. "I do not think middle America's
shopping decision to buy [jewelry] is hinged on the Federal
Reserve."
Before yesterday, Zale's shares gained 49 percent and Tiffany's
33 percent in the past month.
James Gassman, an analyst with Southwest Securities in Dallas,
said jewelry sales should stay strong as long as consumer
confidence remains high and investors maintain faith in the
stock market.
"Zale gets hurt less than people think because they cross a lot
of lines of business," he said.
Mary Forte, Zale executive vice president, said the discussion
about interest rates affecting jewelry sales came as a surprise.
"Jewelry overall is a very constant, consistent business," she
said. For example, about 40 percent of Zale's business is in
bridal sales.
Tiffany spokesman Mark Aaron would not comment on the
potential effect of interest rates on sales but said that "over
the past few years, a very good economy has been good for
the jewelry industry."
PHIL |
