Tiffany now expects revenue growth for the full year to be 7%-8% rather than the previously forecast 10%. Operating margins are expected to be “modestly below” 2011 margins, and EPS is expected to come in at $3.70-$3.80, compared with a previous estimate of $3.95-$4.05. The consensus analyst estimate for full-year EPS had been $3.97.

The company is also adding to its debt, which rose from $687 million in the first quarter of 2011 to $834 million this year. Cash and cash equivalents and short-term investments totaled $343 million, compared with $622 million a year ago. This year’s debt load is equal to 35% of total shareholder equity, up from 30% a year ago.

Tiffany plans to open 24 new stores in 2012, to spend $240 million on capital improvements, and recently increased its dividend. The company’s stock buyback program spent $46 million in the first quarter and another $171 million remains in the program through January 2013. If Tiffany plans to spend at its current rate, debt will continue to grow as cash flows are not likely to keep up.

In pre-market trading this morning, Tiffany’s shares are down about -7% at $57.50 in a 52-week range of $56.21-$84.49.

Paul Ausick

As you may have expected, gold demand actually shrank in the first quarter of 2012 according to this gold data and the drop was down 5% from the high demands of the first quarter in 2011.

The decrease in gold demand was expected due to import taxes in India and high gold prices, but what is interesting is that gold’s demand value was up 16% year over year. The figure was put at $59.7 billion globally and the Council noted an average gold price up 22% year over year to $1,690.57 for the quarter.

The issue that helped support gold were increased demand in China, as well as continued central bank purchases, and inflows into exchange-traded funds.

China’s investment and jewellery demand reached 255.2 tonnes, up 10% on the previous year’s levels, and China accounted for 30% of the global jewelry demand.  Conversely, jewelry demand was down 19% in India, with Indian investment demand down a whopping 46%.  The World Gold Council predicts that China will become the largest source of demand for gold in 2012.

Central bank buying was 80.8 tonnes with purchasing gains in Russia and Kazakhstan.  Mexico was the largest addition with a single purchase of 16.8 tonnes.

Demand from ETFs and other investment products was 51.4 tonnes worth about $2.8 billion.  The SPDR Gold Shares (AMEX: GLD) site lists that it holds 1,276.6 tonnes with a total value of just over $63.5 billion as of May 17.

Market Vectors Gold Miners ETF (AMEX: GDX) measures the companies which explore and mine the world’s new gold.  Shares are up almost 4% at $41.11 after bottoming out just above $39.00 over the last two days but this mining ETF was actually up at $50.00 as recently as April 2.

JON C. OGG

What makes this position important is that Bell currently oversees the merchandising, planning and diamond supply functions for Blue Nile.  This is probably not a “three people in the world can do this” position as far as the company is concerned, but any transition in this function could create a disruption if changes in procedure and policy are made.

Blue Nile noted that Ms. Bell has been with Blue Nile since September 2001.  The company also said in the filing that it has already initiated a search for a new executive who would be in charge of the functions around merchandising, planning and diamond supply functions.

Shares of Blue Nile are not reacting negatively to the news but this stock can have a bit of a cult following.  Shares are up 3.6% at $30.09 against a 52-week range of $25.59 to $50.41.

JON C. OGG

SPDR Gold Shares (AMEX: GLD) is down 1.6% at $156.50 and challenging the absolute lows not seen since April 4, 2012.  Royal Gold, Inc. (NASDAQ: RGLD) has not held up since earnings and its shares are down almost 4% at $57.84 on the day against a 52-week range of $55.00 to $83.87.  Eldorado Gold Corporation (NYSE: EGO) is performing the worst of our tracked gold names with a drop of 5.3% at $12.14, and be advised that is a new 52-week low as the prior range was $12.44 to $22.12 over the last 52-weeks.

iShares Silver Trust (AMEX: SLV), the ETF tracking the true’ Devil’s Metal of silver, is down 2.2% at $28.56.  Silver Wheaton Corporation (NYSE: SLW) can always be counted on for volatility and its shares are down almost 3% at $26.65 against a 52-week range of $25.84 to $42.50. Hecla Mining Co. (NYSE: HL) remains very troubled and very challenged and shares are down again after earnings as revenue and earnings fell hard, despite it maintaining its normal dividend and announcing up to 20 million shares for a buyback plan with proceeds over the next 24 months.  Hecla shares are at a new 52-week low of $3.82 against a prior 52-week range of $3.87 to $8.82.

iPath DJ-UBS Copper Total Return Sub-Index ETN (AMEX: JJC) is down with copper as the anti-growth trade seems to still be winning.  Shares are down 2.1% at $47.00 against a 52-week range of $38.99 to $59.06.  Southern Copper Corp. (NYSE: SCCO) is down 2.2% at $31.50.  This is a drop due to the slowing growth of the emerging world on top of a slower Europe.

Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) remains challenged and its shares are down 2.5% at $35.48 against a 52-week range of $28.85 to $56.78.

With the S&P 500 Index down 0.6% at $1360.00, the go-to assets for risk-on and for hiding out are not working.  With stocks lower it looks like investors are flocking to the safe haven of bonds for the “Sell in May and go away!” theme.  The 30-Year Treasury yield of 3.03% looks to be the lowest long bond yield since February 28, 2012.  The 10-Year Treasury is now yielding just under 1.85% and that appears to be the lows not seen since the start of this last February.

The stock chart from stockcharts.com below on the “GLD” should show you just how bad the gold charts are looking.  If those old lows do not hold, some technicians are going to be calling for a firmer end in the gold trade while other chartists will be telling you a major bounce is coming.

JON C. OGG

Original estimates in the media were put at roughly $80 million for the last of four versions of ‘The Scream’ that was still in private hands.  This auction fetched almost 50% higher than the expectation, although there was speculation that the $80 million price was an understatement.

In recent weeks we had noticed that Sotheby’s stock price had recovered from $36.50 to above $39.00 but that is still shy of the $40+ high in March and still well under the 52-week high of $48.90.  The luxury art market does have price-sensitivity when it comes to the economy and sellers and buyers were reluctant to trade at the end of 2011 when it looked as though Europe might take the global growth story away from the U.S. economy.  That makes it interesting that Sotheby’s is down 2.6% at $38.08 on a day where the market is down only about 0.2%.

The business of ultra high-end collectibles and art is a tricky one and it is a business which many outfits want a piece of.  We have noted earlier this year how the baseball collectible world had two of the famous T206 Honus Wagner tobacco card for sale and how the 100-year old card is now worth millions of dollars in the higher grades.  Another sale has recently taken place with a reported sale of more than $1 million.

eBay Inc. (NASDAQ: EBAY) sells art, baseball cards, and other high-end items.  It has had large sales before, but generally the ultra-high priced items are reserved for specialty auction houses or consignment houses.  Amazon.com, Inc. (NASDAQ: AMZN) even has collectors envy because it recently launched a store site for selling sports collectibles.  Again, neither is ever likely to become the venue for the highest priced collectibles but it is obvious that both have noticed the importance of these markets.

This is the world of extreme alternative investing.  The price of participating has just gone up.

Sotheby’s is hard to invest in for any one event and for any single quarter.  The take here is that if a record has been set at a premium of 50% higher than the estimate of two months ago, this may drive other art collectors to consider releasing some of their prized collection pieces if they think the premium is this high.  That is going to be good for Sotheby’s if that turns out to be the case.

JON C. OGG

For starters, an earlier Easter by 16 days pushed sales out of April into March.  Weak private sector employment data is not helping.  A very warm February and March likely acted as a pull-forward in sales away from April, and a later Mother’s Day most likely pushed some April sales out into May.  Another issue is the elevated but abating price of gasoline for consumers.  The gain of 8.7% in April 2011 is also making further gains more difficult by comparison.

The Monthly Retail Metrics economic diffusion index has rolled over and is now more negative data points than positive for the first time in months.  Here are some of the expected double-digit winners:

In large-format upscale apparel retail stores it is Nordstrom Inc. (NYSE: JWN) that is expected to have the highest marks with same-store sales gains of 6.2%.  Saks Inc. (NYSE: SKS) is expected to be up 5.6%

Lululemon Athletica Inc. (NASDAQ: LULU) may not be considered a ‘fashion’ retailer based upon its yoga and exercise theme, but the expectation is for gains of 21.8% for April same-store sales.

Michael Kors Holdings Ltd. (NYSE: KORS) sells through licensing but also has its own network of stores.  Retail Metrics sees it posting a massive 34.4% in same-store sales gains.

American Eagle Outfitters, Inc. (NYSE: AEO) is already seeing its shares urge by over 11% to $19.99 after it raised guidance based upon sales gains of 17% for stores open at least a year if you include the AEO Direct site.

Keep in mind that many retail outlets have seen two years or more of solid sales gains and that many of these stocks have risen excessively.  It might be getting easier to argue that the retail sector shares have risen enough that any bad news is not likely to be received too well by investors.

JON C. OGG

Munch’s masterpiece will lead Sotheby’s Impressionist & Modern Art Evening Sale on May 2 and estimates are very high. Some put it as high as $80 million, but there is a chance that it could fetch even more if the bidding interest escalates. This world-famous masterpiece is from 1895 and it is rather easily one of the most recognizable paintings in the world of art.

The Scream is a pastel on board painting measuring 32 inches by 23.25 inches and it is the only one of four versions that is still in private hands. Will that remain true after this Sotheby’s auction? Munch’s masterpiece is being sold by Norwegian businessman Petter Olsen, and Olsen’s father was said to be a friend, neighbor and patron of Edvard Munch.

If you do not have access to $80 million or more, don’t sweat it. There are other “more affordable” Edvard Munch paintings coming up for auction as well in the same Sotheby’s auction. Munch’s Summer Night is up for bid and Sotheby’s has an estimated range of $2,500,000 to $3,500,000 for this piece. A darker piece called Night in Saint-Cloud has an estimated range of $1.5 million to $2 million. Lastly, Munch’s Woman Looking in the Mirror is also up for bidding and Sotheby’s has project $5 million to $7 million as its range.

Sotheby’s held an auction in November 2011 where Edvard Munch’s painting called Morning on the Promenade des Anglais was auctioned off. That particular painting had an estimate of $2 million to $3 million, but it sold at a reported $1,986,500 in that auction. Perhaps the weakness in the global markets and the fears of Europe and the fears of a double-dip recession got in the way at the time.

In March of this year there was a knock-off auction in London of The Scream, if you consider an original Andy Warhol painting as not being original. That painting was projected to sell for 200,000 to 300,000 British Pounds and it fetched a premium of 313,250 British Pounds.

Stay tuned!

JON C. OGG

Here are some of the offerings from Costco:

4.25 ct Round  IF Clarity, D Color…. Only One Available Platinum band; IGI Value: $652,755 Costco Price: $459,999.99

6.55 ct Round Brilliant, VS1 Clarity, G Color… Only One Available Platinum band, GI Value: $536,255 Costco Price: $329,999.99

3.06 ct Round, VVS2 Clarity, D Color… Only One Available Diamond Solitaire Ring, Platinum band, IGI Value: $264,295 Costco Price: $179,999.99

3.01ct Round Brilliant, VVS1 Clarity, F Color… Only One Available Diamond Solitaire Ring, Platinum band, IGI Value: $214,295 $139,999.99

Costco has 6 featured rings priced from over $100,000 to the $459,999.99 peak.  While these are all featured as one of a kind items, the intention is likely the obvious move that it wants a proof of concept that it can sell very high-end jewelry (and other items).  The move to offer jewelry is certainly not a new one from Costco.  Wal-Mart Stores Inc. (NYSE: WMT) has also been in the jewelry business for some time even if its high-end rings cap out in the $1,000 to $3,000 range.

As far as how to get up this high in a diamond, Blue Nile Inc. (NASDAQ: NILE) is also in the game of ultra high-end diamonds.  Blue Nile lists the following diamond (without a band) but this is not really apples to apples: Round; 12.84 ct.; Very Good; J; VS2; Blue Nile Price: $488,624

Blue Nile has many large diamonds, and two seen on the list were in excess of $1 million for the diamond alone.  Obviously they are one of a kind as well with on being 12.35 carat and the other being 7.57 carat.

Many retailers want to cater to the high-end consumer.  The efforts and ways that this consumer group gets targeted never seems to have an end.

JON C. OGG

Macau Business reported, “Portuguese-language newspaper Jornal Tribuna de Macau quotes a source close to the project as saying that the deal could be signed before the end of this month depending on the Lands and Public Works Bureau.”

The company had previously announced that it had accepted the terms and conditions of a draft for a 25-year land concession. It does not sound like a done-done deal, but investors should have been expecting this move since that bungled SEC filing. We would always treat such reports of re-reported fake news breaks as a rumor, or even a re-rumor, until a formal press release hits the tape.

Today’s news is good for what is a 4.7% gain to $130.67 in Wynn. While this may prove to be yet one more bit of competition for Melco Crown Entertainment Ltd. (NASDAQ: MPEL), Melco Crown shares are up 3.7% at $14.86.

JON C. OGG

The company itself is selling 17,559,248 shares of the total offering, with selling stockholders selling an additional 1,220,617 shares. Tumi plans to use the proceeds from the offering to purchase preferred shares from shareholders.

Credit Suisse, Goldman Sachs Group, and J.P.Morgan are leading the group of underwriters in this offering; William Blair and Jefferies are also in the syndicate. In 2011, Tumi’s sales were roughly $330 million and its operating income was more than $60 million.

The total number of shares being registered including the overallotment option is 21,596,845 shares.  The company will continue to be controlled by funds managed by or entities affiliated with Doughty Hanson & Co Managers Limited.

JON C. OGG