TiffanyÔÇÖs outlook shines as Zale reports loss

High-end US jeweler Tiffany & Co. reported a higher-than-expected profit and raised its full-year forecast, while Zale Corp reported a loss caused by price markdowns. ┬á Tiffany & Co. doubled its second-quarter net profit to $80 million, compared with $40 million a year earlier.┬á Sales increased 11 percent to $734 million due to strong growth in the Asian-Pacific and European regions. ┬á TiffanyÔÇÖs US sales have been weak recently as consumers cut back on unnecessary purchases, despite its higher-income clientele being less affected by economic downturns than customers who frequent middle-tier jewelers such as Zale Corp.┬á The upscale jeweler said it expects its US sales growth to return in the fourth quarter, once the key holiday shopping season hits. ┬á Despite a 6 percent rise in sales, Zale Corp reported a net quarterly loss of $4.9 million, compared with a profit of $1.5 million last year. Zale had expected the loss, as it severely marked down jewelry to reduce inventory.┬á Zale Corp said in February that it planned to follow a clearance strategy, with a goal of liquidating $100 million in the second half of 2008. The measure follows last yearÔÇÖs poor performance when excess inventory had grown as high-priced products failed to attract customers.┬á To recoup from the loss, Zale has focused on returning to its roots of selling affordable jewelry to the average American shopper, after a failed attempt to go up-market.