Tiffany shares hit a low as economic woes continue

Shares of Tiffany & Co. slipped to a multi-year low before rebounding on Friday, after an analyst warned that softening consumer spending and declining tourism will hurt the jeweler this year and in 2009.

Tiffany shares rose $1.62, or 9.1 percent, to close at $19.48, after setting a nine-year low of $16.75 earlier in the session.

Tiffany, which posts third-quarter results next week, is being hurt by a slowdown in luxury spending in the U.S. and declining tourism, according to Cowen & Co. analyst Laura Champine.

Champine, who rates the stock "Underperform," also expects a weak economy to hurt results in Japan, Europe and emerging markets.

Looking specifically at Japan, Champine said Tiffany's expectation for same-store sales in the country to decline in the mid-single digits "could be bullish," as Champine expects Japanese consumers will scale back on spending.

"We believe the company's outlook for a low-double-digit increase in total sales dollars for the entire Asia region, including Japan, is unlikely," Champine wrote in a client note.

Champine also said economic data in the U.K. has been weak, and this country accounts for about half of Europe's sales.

"We expect a deteriorating outlook for the company's fiscal 2009 European results," Champine wrote.

Champine said it's likely Tiffany will forecast an outlook for fiscal 2009 below Wall Street expectations next week when reporting quarterly results.

Shares of Tiffany have declined 61.2 percent so far this year.