Analyst: Tourism to boost Tiffany's 2Q profit

NEW YORK—Tiffany & Co. will benefit from tourism at its U.S. locations in the second quarter, but the high-end jewelry retailer may lower its fiscal 2008 profit outlook when reporting quarterly results on Thursday, according to one analyst.

Buckingham Research Group analyst Barbara Wyckoff raised her profit per share estimate for the second quarter by 6 cents to 54 cents, expecting strong sales at U.S. locations from tourists.

Wyckoff also expects a more balanced merchandise mix to boost gross margin.

However, Wyckoff warned that these gains will start to fade as the dollar gains strength and the summer season ends. In terms of sales by market, the U.S. in 2007 represented 59 percent of total sales, while Japan represented 17 percent. Other Asia-Pacific was 11 percent, Europe was 8 percent, and the remainder fell in other markets.

Wyckoff, who rates the stock "Neutral," also said she would not be surprised if Tiffany lowered its fiscal 2008 profit outlook.

"We would not be surprised if management guided down earnings expectations, given the anticipation of sales pressure through the third quarter and into the very important Christmas selling season," Wyckoff wrote in a client note.

Analysts polled by Thomson Financial expect 54 cents per share and sales of $719.9 million.

Shares of the company rose 22 cents to $39.51 in midday trading.