There are signs that consumers at all levels are tightening spending

Sales at US stores open at least a year fell 2% in the two months to December 31 compared to a year earlier, though overseas sales rose 5% for the period.

The firm said it thought the recent fall in spending showed customers were showing a more "cautious attitude".

Before Christmas, the company had predicted a strong holiday season.

Tiffany reduced its profit outlook for the 12 months to the end of this month, to a range of $2.25 to $2.28 per share, down from November's forecast of between $2.25 and $2.30.

The firm has plans to continue expanding in a bid to boost sales. It aims to launch five new outlets in the US, as well as up to 20 new stores in Europe and Asia, to add to its existing 150 stores worldwide.

The firm's outlook consolidates the view that consumers, at every level, are tightening their spending.

Without solid consumer spending, a key driver for economic growth in the US, there are worries that the world's largest economy could severely contract and some leading banks are already talking about the possibility of a recession.