Leading U.S. jewelers Zale and Tiffany on Tuesday reported resilient holiday sales even as consumers reined in spending on luxury goods in the recession and the aftermath of the Sept. 11 attacks.

Zale Corp., North America’s largest specialty jeweler, said sales at stores open at least one year, a key indication of retail performance, rose 1.8% for November and December as it sorted out inventory and merchandising problems, Reuters reported.

Tiffany & Co. New York, which focuses on affluent consumers, said its same-store sales for the period were down 2 percent, a decline analysts said was less steep than expected as traffic picked up later in the holiday season, Reuters reported. The company also presented a bullish outlook for the current quarter.

Analysts had feared that the $40 billion-plus jewelry industry would see its worst Christmas since 1991, when the U.S. economy sank into a recession in the midst of the Gulf War.

While those fears did not come to pass, both Zale and Tiffany said the retail environment remains difficult.

“Despite recent upward movement in consumer confidence, we think it’s too early to call it a trend,” Tiffany Chief Financial Officer James Fernandez reportedly said in a conference call.

The company said it sees no meaningful improvement” in earnings until the second half of the year ending in January 2003, Reuters reported.

Tiffany said it expects earnings for the fourth quarter ending on Jan. 31 to hit the upper end of its forecast of 49 cents to 56 cents a share, although sales should come in about 3% lower than a year earlier, Reuters reported.

President and Chief Executive Michael Kowalski said higher gross margin resulting from a more profitable product sales mix, as well as ongoing expense controls, will offset sluggish sales, Reuters reported.

The earnings forecast, however, is down from the 60 cents to 65 cents a share projected before the Sept. 11 attacks on New York and Washington. Analysts polled by research firm Thomson Financial/First Call have on average been expecting a profit of 50 cents a share, Reuters reported.

Tiffany said it expects full-year earnings at the higher end of its initial forecast of $1.09 to $1.16 a share, with a mid to high single-digit percentage increase for fiscal 2003.

First Call’s 2003 consensus forecast is $1.18 a share, up about 8% from $1.09 estimated for the current year.

As consumers shy away from merchandise that costs anywhere from $10,000 to more than $25,000, Tiffany has begun offering customers lower priced items that help draw store traffic and also carry higher margins.

WR Hambrecht & Co. analyst Kristine Koerber told Reuters that the merchandise shift is a good step.

The company’s flagship store in midtown Manhattan was hit particularly hard, with sales dropping 12% due to reduced traffic following the Sept. 11 attacks and job losses in the financial services industry, including Wall Street, Reuters reported.

That store is a key component of Tiffany’s business as the New York region accounts for about 13% of the company’s total sales. U.S. same-store sales were down 3%, Reuters reported.

Zale, which targets a wider range of consumers than Tiffany does, said its total holiday sales rose 3.6% to $763.4 million.

The Dallas company, which operates more than 2,300 stores under its own name as well as Gordon’s, Piercing Pagoda and Bailey Banks & Biddle, said it was able to increase market share without sacrificing operating margins.

“Our holiday sales are an indication of the progress that has been made in the company’s repositioning,” Chairman and Chief Executive Robert J. DiNicola reportedly said in a statement.

Zale has spent much of the past year refocusing on wedding and engagement rings and on improving the quality of its merchandise.

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