UPDATE 3-Tiffany slashes 2008 view on weak sales, shares fall
* Q3 net EPS $0.35 vs Wall St view $0.24
* Q3 sales down 1 pct to $618.2 million
* FY EPS outlook cut to $2.30-$2.50 from $2.82-$2.92
* Shares fall as much as 10 percent (Adds analyst comments, sales details, updates share price)
NEW YORK, Nov 26 (Reuters) - Upscale jeweler Tiffany & Co (TIF.N) slashed its full-year forecast and said it plans to cut staff and trim its 2009 store growth plans, in a fresh sign that the shrinking U.S. economy is hurting affluent consumers.
Until recently, Tiffany, like other high-end retailers, was seen as more immune to economic turbulence because of its affluent consumer base. But the global financial crisis has rocked wealthy consumers' confidence about spending.
Tiffany posted a sales drop of 5 percent in its Manhattan flagship store on Fifth Avenue, which had enjoyed strong gains in past quarters from tourist spending.
"This is the last luxury retailer we have heard from and trends in the US are pretty much exactly where Saks (SKS.N), Nordstrom (JWN.N), Neiman (Marcus) and everybody else is," said Pali Capital analyst Stacey Widlitz.
Much like Saks, whose CEO Stephen Sadove said earlier this month that consumers were in a "frozen mode," Tiffany said it was unsure about when sales would pick up.
"It is impossible to know when consumer confidence will be restored," the jeweler's Chief Executive Michael Kowalski said in a statement.
Tiffany's outlook punctured investor hopes and added new worries about the holiday shopping season, which some industry experts predict will be the worst since the early 1990s. Its shares fell as much as 10 percent, but regained some of those losses to trade 4.3 percent lower by late morning.
The New York-based jeweler expects full-year net earnings of $2.30 to $2.50 per share, with sales unchanged to down 2 percent. It previously forecast sales growth of about 9 percent and earnings of $2.82 to $2.92 per share for the year.
For the current quarter, which includes the holidays, Tiffany expects worldwide sales to decline 13 percent to 20 percent. U.S. sales will still be among the hardest hit -- the company forecast U.S. same-store sales to decline 25 percent to 30 percent in the fourth quarter.
Tiffany's results followed reports from mid-tier rivals Zale Corp (ZLC.N) and Signet Jewelers Ltd (SIG.N) on Tuesday. Both jewelers posted deeper-than-expected losses and Zale withdrew its full-year outlook. [ID:nN25266774]
WEAK NOVEMBER Continued...
