It is better to say nothing than to mumble. Investors read wishy-washy comments from management as a sign of trouble and that is precisely how it has played out at Tiffany. In November, the company indicated that there would be a slowdown in sales at year end but did little to explain the causes or details. The shares took a nasty step down then, losing about a 10th of their value. Yesterday, the company updated investors on holiday sales and results were even worse than expected. Earnings guidance was trimmed and another 10th was promptly shaved off the shares.

Explaining the results, Michael Kowalski, chief executive, said that “sales weakened markedly in the United States and Europe”. And so they did, but this was not the most frightening aspect of the figures. In the first two months of the fourth quarter, same store sales, adjusted for currency, grew by 2 per cent year on year in North America and fell by 4 per cent in Europe, after growing by 15 per cent and 6 per cent in the third quarter, respectively. But a slowdown in these regions was expected. The truly unpleasant surprise was that sales growth in Asia (outside of Japan) dropped precipitously, from 36 per cent to 12 per cent. Analysts expected closer to 20 per cent.

So if Tiffany’s results are an indicator of a slowdown in luxury spending, which has held up well despite gloom elsewhere, the problem looks disconcertingly like a global one. Owners of luxury companies such as Tiffany, Richemont and LVMH, which all have returned at least 50 per cent over five years amid a weak period for equities overall, must consider the possibility that the luxury trade has run its course. Shares in these companies, trading with mid-teens price-to-earnings multiples, are not expensive but if momentum remains this bad, they could get cheaper.