It sure looked like it on Friday as U.S. luxury jeweler Tiffany & Co reported a 2 percent drop in sales at its established U.S. stores in the all-important holiday period. 
It doesn’t look like investors took the news too well.
Spooked and starting to doubt the strength of the luxury sector, they sent its shares slumping to a 14-month low.
Still, the company said a big “thank you” to tourists during its call with investors.
It looks like those European and Chinese tourists lent a nice boost to holiday sales at its flagship store on the famous Fifth Avenue in Manhattan, and ended up somewhat salvaging its holiday sales results.
Not even the crème de la crème of its U.S. customers came to its rescue, apparently. Sales of some jewelry that sell for more than a cool $50,000 were not exactly sparkling. Possibly, they traded down for the $500-$1,000 silver stuff instead? That category sure did well, according to Tiffany.
Even Saks noted on Thursday that its customers had started looking for discounts.
Tiffany ended up trimming the top end of its profit forecast for the year and is left mulling uncertain sales trends as it tried to issue a profit outlook for the next year.
So much for luxury staying high and dry.
Blue box, anyone?
(Photo: Reuters)
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The market appears to be responding too harshly to Tiffany’s statement, since the company’s sales performance was still strong overall. The fact that it’s able to develop its overseas stores should be a positive sign for investors, since it serves as a hedge against softness in the U.S. market. In any case, the dip in share price might be a good opportunity for savvy investors to pick up a good stock at a low price.
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