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Tiffany (NYSE:TIF) is certainly losing its elite cache due to too many stores -- it seems like one is in every mall. There was a time when getting a gift in that tell-tale robins-egg blue box meant something -- you were being given something special, something of luxury and quality. But today, Tiffany’s jewelry is too accessible. At the same time, a pullback in spending from high-income consumers could limit future revenue growth.

For now, the numbers are strong: total sales for the second quarter were up 9% from the prior-year quarter, driven by strength in Tiffany's domestic as well as international markets. The company expects results for the entire year to reflect growth in the low double digits, and it has been engaged in a repurchasing program.

However, De Beers' new retail store in New York City (a venture with luxury conglomerate LVMH) could hurt Tiffany's flagship, which makes up 10% of TIF’s sales. Further, high commodity prices and De Beers' significant control over the diamond market could continue bringing down Tiffany’s margins. Tiffany has already seen expenses grow in the first half of this year. Some of these costs were due to a one-time promotional expense to launch a new Frank Gehry line. Other costs were due to expansion, and may be offset as these investments bring returns.

CEO Michael Kowalski believes results are about to improve; he points to the solid growth in comparable stores and the double-digit growth abroad, claiming, “Our ongoing plans for store openings and new product introductions sustain our confidence in Tiffany's ability to achieve higher rates of growth over the long-term.”

I’m not so sure. If the Tiffany brand continues to lose its luster and consumers do curtail their spending as is expected, even improved margins won’t be enough to make this company more profitable.

Type of stock: A well-established growth consumer-goods stock, with a brand that is moving from classic blue to tired blue.

Price target: At just under $36, TIF is currently trading at the middle of its 52-week range of $29 to $43. The stock has rebounded over the past few months, but I’m not sure how much higher it will go. The fourth quarter is always the strongest due to holiday shopping, so I’d keep an eye on consumer indices. If this is looking like a good holiday season you may want to get in for a short term game, but only if you can get it in the low to mid $30s.

TIF 1-yr chart:

Source: Tiffany: Too Many Little Blue Boxes Out There