Tiffany profit beats view

By Aarthi Sivaraman

NEW YORK (Reuters) - Jeweler Tiffany & Co (TIF.N: Quote, Profile, Research, Stock Buzz) reported a better-than-expected quarterly profit on Friday helped by stronger international sales, and raised its full-year profit forecast.

The New York-based jeweler is expected to derive a significant chunk of its sales in the December holiday shopping season. Jewelers can derive up to 25 percent of their annual sales in December alone, according to Spending Pulse, the retail data service of MasterCard Advisors.

Investors and retailers, however, fear that U.S. consumers, facing high gas and food costs and a housing market downturn, will not spend their holiday dollars as freely this season as in past years.

Still, analysts expect luxury retailers to emerge relatively unscathed from this holiday season, as their wealthy customers, who tend not to worry about gas or food prices, are expected to keep spending.

"We are now one month into the all-important November-December holiday season and are pleased with overall sales growth that is meeting our expectations," Chief Executive Michael Kowalski said in a statement.

Kowalski said it was premature to extrapolate current results or comment on consumer spending since the vast majority of its holiday selling had not yet happened.

Tiffany still raised its fiscal 2007 earnings forecast. It now expects to earn $2.69 to $2.74 a share from continuing operations, including the gain from the Tokyo flagship sale. It had previously forecast earnings of $2.64 to $2.69 per share.

The company also increased its full-year sales growth forecast by 1 percentage point to 15 percent.