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Tiffany & Co cuts full-year sales and profit forecasts as global economic woes hurt spending on luxury jewelry

The high-end jeweler said spending by Wall Street bankers has slowed and heavy discounting by rivals has been a problem.

Tiffanys necklaceEnlarge
Tiffany & Co displays a diamond necklace with a 128.54 carat yellow diamond at a reception to celebrate the company's 175th anniversary in Tokyo on May 16, 2012. (AFP/Getty Images)

Tiffany & Co slashed its full-year sales and profit forecasts today as Wall Street bankers – smarting from smaller bonuses in 2011 -- cut back spending on high-end jewelry.

According to the Associated Press, Tiffany’s earnings in the first quarter were almost unchanged from the same period last year as global economic woes weighed on luxury spending.

Spending by financial sector workers also continued to slow while “substantial competitive discounting” remained a problem, MarketWatch added.

According to Bloomberg, Wall Street's cash bonus pool fell by 14 percent last year to $19.7 billion, which was the lowest since 2008.

Net profit rose to $81.5 million, or 64 cents per share, from $81.1 million, or 63 cents per share, last year, Tiffany said in a statement on the company's website.

Analysts had expected 69 cents per share.

Forbes reported that Tiffany’s worldwide sales rose 8 percent year-on-year to $819 million, as sales in the Asia-Pacific soared 17 percent.

Tiffany said it now expected earnings per share to be in the range of $3.70 to $3.80 for the year. It had originally expected $3.95 per share to $4.05 per share.

It also expects worldwide sales to be up 7 percent to 8 percent, instead of the 10 percent originally forecast.

Tiffany chief executive Michael J. Kowalski said the revised forecasts reflected “decelerating rates of economic growth in many countries,” according to the statement.

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http://www.globalpost.com/dispatch/news/regions/americas/united-states/120524/tiffany-co-cuts-full-year-sales-and-profit-forec