Tiffany Shows Sales Decline

The Wall Street Journal is reporting 1st quarter profits at Tiffany's are off 64% from a year ago. Also, first quarter US sales have declined 34% from those reported a year ago. The article stated there were some signs the slump was slowing, but it does show the top end of the market is not immune to economic woes. The NY flagship store saw sales drop 42% for 1st quarter 2009 and 34% for 4th quarter 2008. The article states high end sales, those over $50,000.00 were impacted the most.

The WSJ article states The takeaway is that "there are benefits to geographical diversification," Aaron said in an interview after the call. "If one area recovers slowly, the pace may be better in other places that we have locations."

Still, Tiffany is struggling, with fiscal first-quarter earnings plummeting 64% and margins weakening mostly on higher product costs.

"While currently there are some signs of stabilization in trends overall, the U.S. has improved only slightly in May, which keeps us cautious as this region accounts for approximately 50% of sales," said Credit Suisse analyst Paul Lejuez in a research note.

Tiffany shares are off 83 cents, or 3%, to $27.30.

High-end jewelry sales over $50,000 continues to post the greatest decline among Tiffany's product offerings as the wealthy display frugality.

Tiffany and some other prestige brands have resisted moving downscale. Tiffany earlier this month did broaden its scope by buying the upscale Lambertson Truex handbag brand. Rivals LVMH Moet Hennessy Louis Vuitton (LVMUY) and Hermes International SA (RMS.FR) have escaped some of the luxury-sector wreckage with help from branded handbags.

To read the full WSJ article, click HERE.