Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (44224)	11/14/2001 4:32:45 PM
From: Dealer	Respond to of 65232

???? (retail report ????) Tiffany Profits Fall, Holiday Outlook Dim By Ellis Mnyandu NEW YORK (Reuters) - Luxury jeweler Tiffany & Co. (NYSE:TIF - news) on Wednesday said its third-quarter profits fell 34 percent as fears of more attacks in the U.S. kept tourists and shoppers at home, stalling sales in a faltering economy. ADVERTISEMENT Although the New York-based retailer, known for its robin's egg blue gift boxes, managed to beat lowered Wall Street estimates, it voiced caution about the holiday sales outlook. Analysts said they expect the fallout from a stagnating U.S. economy, rising unemployment, a jittery stock market and fears of more attacks like the ones on Sept. 11 to push the $40 billion-plus jewelry industry into its worst Christmas since 1991, when the U.S. economy spiraled into a recession in the midst of the Gulf War. ``There's so much uncertainty which I think is going to keep consumers nervous,'' said Brian Tunick, an analyst at Bear Stearns. Tunick said he expects a very erratic and unpredictable holiday shopping season, the kind not seen since 1991. Tiffany said it has not yet seen any sales recovery since the start of November from Sept. 11, but reaffirmed its fourth-quarter projection of profits between 49 cents and 56 cents a share. Shares of Tiffany closed up $1.65, or 6.2 percent, at $278.35 in Wednesday trading on the New York Stock Exchange, largely tracking a rising retail sector that jumped on upbeat data. GLOOM, HOLIDAY UNEASE Tiffany's unease about the holiday season mirrored that of Zale Corp. (NYSE:ZLC - news), the nation's largest jewelry retailer, which on Tuesday reported a narrower-than-expected third-quarter loss. Compared to Tiffany, Dallas-based Zale operates more stores and its business is not solely primed at the highly affluent customer. Zale shares finished up $1.38, or 4.1 percent, to $35.38. Since Sept. 11, Tiffany's stock has lost about 4 percent, while Zale is up by about 13 percent, vs. a 13 percent rise in the Standard & Poor's Index of retailers. (.SPRETAIL) Citing expectations of a modest rise in gross margins due to a sales mix as well as expense control, Tiffany also raised its 2001 earnings forecasts slightly to $1.09 to $1.16 a share from its earlier range of $1.05 to $1.15. But it added that it expects the current retail gloom to persist through into the first half of 2002. Analysts pointed out that for jewelry retailers the pricey jewelry. ``The results are largely as expected. What we see is continued macroeconomic pressure,'' said David Schick, an analyst at SunTrust Robinson Humphrey. Tiffany said net income in the quarter ended Oct. 31 was $24 million, or 16 cents a share, vs. $36.3 million, or 24 cents a share, a year ago. Wall Street analysts polled by research firm Thomson Financial/First Call expected third-quarter earnings ranging from 12 cents to 15 cents a share, in line with the company's lowered forecasts. The consensus was 13 cents. Tiffany said net sales fell 10 percent to $333.1 million from $372.1 million a year ago, while sales at U.S. stores open at least a year, or same-store sales, fell 19 percent. NEW YORK EXPOSURE Tiffany said same-store sales at its New York flagship store fell 29 percent in the quarter as the Sept. 11 attacks sent the city's tourism reeling amid fears about airline safety. Analysts said Tiffany's large exposure in the New York market compounded the economic impact on its business. Tiffany derives about 13 percent of total sales in the New York region. Since the Sept. 11 attacks, hundreds of thousands of jobs have been lost and consumer sentiment has weakened as shoppers shift their money from luxuries to bare necessities like food and medicines. ``The current retail environment is clearly a difficult one, with numerous factors having an adverse effect on the mood of consumers in the U.S. and around the world,'' Tiffany President and Chief Executive Michael Kowalski said. He said Tiffany expects total fourth-quarter sales to fall by mid-single-digit percentages as same-store sales in the U.S. are expected to drop by low-double-digit percentages. NO MARKDOWNS AT TIFFANY But Schick said Tiffany could continue to see positive gross margin gains as consumers shift to lower-priced merchandise. ``It remains a tough environment for business, although their ability to generate a gross margin gain in a softer sales environment is notable,'' he said. Tiffany said customers are spending less per transaction and the drop-off in shopping is apparent in the mid- to higher-price point goods. But the retailer added that there was still a lot of ''activity'' at price points above $10,000 and $25,000. ``There will be no clearance sale at Tiffany,'' Tiffany Chief Financial Officer James Fernandez said. For the fourth quarter, analysts expected a range of 44 cents to 54 cents a share, with the consensus at 50 cents. Full-year estimates range from $1 to $1.10, with a mean estimate at $1.07.