Although the results were positive with luxury brands showing sales growth, there is concerns the sector is starting to slow as reported by Reuters.
Reuters reports on Tiffany
Click HERE to read the complete Reuters article.CLOUD ON LUXURY'S HORIZON
The mentions of trouble in Europe and the United States are the latest sign that months of stock market volatility and fears about global economic growth might finally be taking a toll on luxury consumers' confidence.
In October, Saks Inc (SKS.N) and Nordstrom Inc (JWN.N) reported sales that disappointed Wall Street, and earlier this month Saks CEO Steve Sadove said the stock market's gyrations gave the department store chain reason to plan "cautiously."
Tiffany shares were down 9.03 percent to $66.98 and brought down other luxury chain's shares. Saks was down 3.6 percent, Coach Inc (COH.N) 2.2 percent and Ralph Lauren Corp (RL.N) 2.7 percent. The Standard & Poor's Retail Index .RLX was up 0.4 percent.
Still, Saks, Neiman Marcus Group Inc NMRCUS.UL and Nordstrom Inc (JWN.N) all recently reported big sales gains for the most recent quarter. And on Monday, Neiman CEO Karen Katz said: "The most affluent luxury customer is spending with confidence."
Tiffany expects sales to rise at a low-teens percentage rate for the holiday quarter. In the third quarter, sales at stores open at least a year, excluding the effect of currency translations, rose 16 percent.
Tiffany said it expects fourth quarter earnings per share of $1.48 to $1.58, below the $1.63 Wall Street analysts were expecting, according to Thomson Reuters I/B/E/S.
Tiffany reported net income of $89.7 million, or 70 cents per share, for the third quarter ended October 31, up from $55.1 million, or 43 cents per share, a year earlier and above the 61 cents a share that analysts were expecting, according to Thomson Reuters I/B/E/S.
Bloomberg reports on Prada (article posted in full) which is more optimistic than the report on Tiffany.
Prada SpA reported third-quarter profit that beat some analysts’ estimates and said it’s confident of consolidating its performance over the year. Net income rose 75 percent to 93.6 million euros ($125 million) in the three months ended Oct. 31, compared with the year-earlier period, the Milan-based luxury-goods maker said today on its website. The average of two analysts’ estimates compiled by Bloomberg was for profit of 89.9 million euros. Revenue advanced 33 percent to 596.1 million euros. Prada, which in June sold shares in Hong Kong’s biggest initial public offering this year, plans to open about 80 stores annually over three years as Asian shoppers splurge on leather handbags and other luxury items. The owner of the Prada, Miu Miu, Church’s and Car Shoe brands is confident of the Asian market, Deputy Chairman Carlo Mazzi said in September. Personal luxury-goods sales may rise 12 percent in the Asia-Pacific region in 2011, excluding currency swings, Bain & Co. estimates. The company’s retail sales pattern in November is in line with previous months, Prada said. While the luxury-goods maker is ready to react to defend profitability, “we remain highly confident about the potential of the luxury market,” it said.
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