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Will Tiffany Sales Predict The US Economy?
With the stock market booming over the past few days, Market Watch asks if the overall solid results reported by Tiffany last quarter is a harbinger of better economic times ahead.
Their opinion is that it doesn't.
TIF 42.59, +4.00, +10.4%) reported solid results, but a good quarter doesn't necessarily indicate that the consumer, worried about jobs and pay for basics such as gasoline and groceries is back in spending mode.
Tiffany's results show some shoppers are still cautious, particularly on the lower price points geared to the budget conscious customer. And since fortunes can dissolve at a chilling pace -- hello, Bear Stearns -- even more affluent shoppers aren't spending as freely as in the past.
On a conference call with analysts, Tiffany said fourth-quarter sales of silver jewelry were "soft" below the $500 range. On the higher end, fine jewelry sales from $10,000 to $50,000 were "relatively stronger," than in the $1,000 to $10,000 range. Even sales over $50,000, which the company says makes up nearly 10% of U.S. retail annual sales, were "modestly lower" than the prior year.
Sales at Tiffany's New York flagship store jumped 10% in the quarter, with the majority of sales due to the foreign tourists. For the year, sales to foreign tourists represented 14% of U.S. retail sales, up from 11% in the prior year.
Investors want to be upbeat after a grisly and gloomy spell. If Home sales rebound, Oil prices come down, the dollar rebounds against the major currencies, consumer confidence will increase and luxury goods will robustly sell.
That's alot of "IF's" and it's going to take more than a few days of good economic news to convince the U.S. consumer to open his wallet.
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