* Tiffany cuts FY EPS view by 25 cents to $3.70-$3.80
* Tiffany sees FY sales up 7-8 pct; previous view 10 pct
* Signet sees Q2 EPS 78-84 cents vs Street view 90 cents
* Tiffany shares down 7.7 pct; Signet down 11.1 pct
By Phil Wahba
May 24 (Reuters) - Tiffany & Co cut its fiscal-year sales and profit forecasts on Thursday, blaming slowing growth in key markets like China and weakness in the United States as shoppers think twice about spending on high-end jewelry.
The forecasts followed a first-quarter when sales at Tiffany's famous flagship store on Manhattan's Fifth Avenue fell 4 percent. The chain's weakest London store was the one in that city's financial district.
Even Tiffany's recent torrid gains in Asia have cooled off because of some softening in economic growth in China and elsewhere, the company said.
"We believe those conditions may remain soft for the next couple of quarters," Chief Financial Officer Pat McGuiness said on a conference call.
Tiffany cut its full-year global net sales growth forecast to a range of 7 percent to 8 percent, from a prior outlook of 10 percent. It reported lower-than-expected first-quarter earnings and cut its full-year profit outlook by 25 cents a share, to a range of $3.70 to $3.80.
The biggest reason for the lower forecasts was weakness at home, where the company gets 45 percent of its revenue.
The upscale jeweler's U.S. sales started softening in the fall and over the holidays amid concerns about Wall Street layoffs. They picked up in the winter but softened again in April, when the S&P 500 ended a rally and began to slide, as U.S. consumer sentiment soured and fears about Europe's debt crisis spilling over came to the fore.
Tiffany rival Signet Jewelers Ltd also issued a disappointing forecast and posted quarterly results that showed slowing growth in its U.S. sales, particularly at its pricier Jared chain.
Luxury sales are often correlated with the stock market, which affects how affluent people see their net worth. High-end shoppers tend to pull back on jewelry, where styles change less season to season, before items like expensive designer shoes or gowns.
To keep up with rising diamond and gold costs, Tiffany has also raised prices in recent years. But that may have cost it some sales, said Brian Sozzi, chief equities analyst at NBG Productions.
"Tiffany is battling a host of external headwinds and years of price increases that are causing consumers pause," he said. Tiffany is not planning any "significant" new price increases.
Tiffany sales increased 7.6 percent to $819.2 million in the first quarter ended April 30, while same-store sales rose 4 percent, helped by gains in Asia, Brazil, Canada and Mexico.
Earnings were $81.5 million, or 64 cents per share, up slightly from $81.1 million, or 63 cents per share, a year earlier. That was 5 cents below what Wall Street analysts were expecting, according to Thomson Reuters I/B/E/S.
Business in Japan, its second-biggest market, continued to recover from the impact of the 2011 earthquake and tsunami, and sales rose 15 percent.
Sales at Tiffany stores open at least a year were flat in the Americas and Europe during the quarter, excluding the impact of currency.
Tiffany shares were down 7.7 percent at $57.02 in afternoon trading, while Signet fell 11.1 percent to $42.46.
SIGNET'S GROWTH SLOWS
Results from Signet, whose U.S. chains include Kay Jewelers, also showed signs of a slowdown. U.S. same-store sales rose 1.2 percent in the first quarter ended on April 28, far below the torrid pace of recent periods.
The slowness was particularly marked at Jared, where comparable sales in the first quarter edged up just 0.2 percent, compared with double-digit percentage increases last year.
Signet's largest chain, the moderately priced Kay, fared better, with comparable sales up 2.9 percent. But Zale has been fighting back, and on Wednesday reported a 10.9 percent gain in the United States.
Signet said it expected earnings per share of 78 cents to 84 cents in the current quarter, below analysts' estimates of 90 cents.