• by Sarah Mahoney  @mahoney_sarah, November 30, 2011

Tiffany reported strong sales and profits for the third quarter -- but tempered its outlook for the holiday. And with concerns about the economy still clouding holiday forecasts, luxury experts say even the affluent are likely to be toning gifts down this year.

Tiffany says sales climbed 21% to $821.8 million, and rose 17% when the effect of translating foreign currency was excluded. On a comparable-store basis, sales spiked 16%.  And in its New York flagship, sales rose a sparkling 24%. Net earnings soared 63% to $89.7 million, compared with $55.1 million in the same period a year ago.

Still, Michael J. Kowalski, its chairman/CEO, was somewhat subdued in his outlook for the quarter ahead. “We are, of course, mindful of continued short-term economic challenges and uncertainties in some markets,” he said in its release. “Worldwide sales-to-date at this relatively early stage of our November-December holiday season are tracking in-line with our current expectations despite recent sales weaknesses in Europe and in the eastern part of the U.S.”

Part of the issue, of course, is consumer spending in general. But Pam Danziger, president of Unity Marketing, which tracks the luxury market, tells Marketing Daily there are more reasons that the luxury jewelry market may not shine so brightly this holiday season.  “While jewelry sales have returned to their pre-recession levels,” she says, “much of that is due to the rising cost of precious metals. And you can’t discount the power of this Occupy Wall Street movement. If you’re in the 1%, you want to go silent this holiday -- this is not going to be the year for extravagant bling-bling jewelry.”

Instead, she predicts that affluents will continue their practical streak, as they have for the last few years. Higher-income families “are looking to give gifts of things people really need, and technology fits beautifully in that framework. The prices are great, and those are tools people need to function. Overall, I think this won’t be the Christmas for a big rock on the finger,” she says. “There will be less show, and more substance.”