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* Tiffany holiday same-store sales flat worldwide
* Tiffany sees FY '13 net income at low end of own forecast
* Zale U.S. fine jewelry same-store sales up 2.2 percent
* Tiffany shares down 4 pct, Zale up more than 9 pct (Adds analyst comment, updates stock prices)
By Phil Wahba
Jan 10 (Reuters) - Tiffany & Co posted holiday sales that showed its torrid growth of recent years was sputtering in the United States, Japan and Europe, with China the only bright spot for the upscale jeweler.
The company, famed for its blue boxes and its Fifth Avenue flagship in Manhattan, said on Thursday that worldwide sales at stores open at least year were flat in November and December, a period that can account for one-third of jewelers' annual sales and almost half of profit.
Separately, Tiffany's lower-end peer, Zale Corp continued to show an improvement, but at a slower pace. U.S. holiday same-store sales at its Zales and Gordon's stores rose 2.2 percent, well below the year-earlier 9 percent increase.
Tiffany gave a modest profit forecast for the coming fiscal year and Chief Executive Officer Michael Kowalski said Tiffany was planning "conservatively" for next year's sales growth because of "uncertainty" about the economy in all of its major markets.
Concerns about the state of the economy and the "fiscal cliff" debate, which raised the specter of automatic tax increases on Jan. 1, weighed on shoppers in December, hurting overall holiday retail sales in United States.
But a looming debt-ceiling debate that could revisit government spending and tax levels could again curb shoppers' appetite for jewelry just before the next important season for jewelers.
"Valentine Day's going to be a period where we going to be watching what we're spending," IBISWorld senior retail analyst Nikoleta Panteva said. Jewelry is far from essential and it takes little to see shoppers pull back, she added.
Tiffany's net worldwide sales during the holiday season rose 4 percent, helped primarily by gains in China. Elsewhere, the numbers were lackluster, even falling 2 percent at Tiffany's Fifth Avenue flagship.
In Europe, sales at stores open at least a year were flat, while in Japan, Tiffany's second-biggest market, they rose 1 percent, excluding the impact of currency fluctuations. In Asia, same-store sales were up 7 percent.
Because of the sluggish holiday sales, the company expects earnings to come in at the lower end of its earlier forecast of $3.20 to $3.40 per share for the fiscal year ending Jan. 31.
Tiffany shares were down 3.9 percent at $60.81 on Thursday afternoon on the New York Stock Exchange. They had risen 3.4 percent in the two days since Kay Jewelers and Jared parent Signet Jewelers Ltd, the largest U.S. jeweler, raised expectations about Tiffany's performance by reporting stronger-than-anticipated holiday numbers.
A difficult economy prompted Tiffany to scale back its sales and profit forecasts three times this fiscal year.
Earlier in the year, Tiffany, which is best known for its pricey diamond necklaces and rings, blamed weak demand for its less expensive silver jewelry, which accounts for a quarter of its business.
Citi analyst Oliver Chen said in a note that Tiffany needed to improve its selection of lower-priced jewelry "to regain a customer who may not be able to afford the current offering."
Despite Tiffany's challenges, Oppenheimer & Co analyst Brian Nagel said in a note that he expected the stock to recover over time because of rising demand for luxury goods.
Tiffany expects net earnings to rise 6 to 9 percent in the year beginning in February. That means a range of $3.39 to $3.49 per share, Canaccord Genuity analysts said in a note, which would be well below the $3.78 Wall Street consensus estimate.
Zale's U.S. holiday numbers were weaker than the 4.7 percent rise in U.S. same-store sales at Signet Jewelers Ltd, but Zale reiterated that it expects to return to profitability this fiscal year after several years of losses. Its shares were up 9.3 percent at $4.58 on Thursday afternoon.
Zale also operates two chains in Canada, where same-store sales rose 2.7 percent. (Reporting by Phil Wahba in New York; editing by Lisa Von Ahn, Grant McCool and Matthew Lewis)