(By Balachander) Tiffany & Co. (NYSE:TIF) reduced its 2012 forecast after the jeweler's second-quarter earnings trailed market expectations amid sharp contraction of margins.
Earnings per share (EPS) on an adjusted basis fell 16.3 percent to 72 cents from 86 cents, trailing Wall Street projections by a penny. Net earnings increased 2 percent to $90 million.
Net sales rose 1.6 percent to $886 million, yet missed consensus estimate of a 2.1 percent increase. Comparable store sales decreased 1 percent.
Gross margin shrank to 56.3 percent from 59.0 percent partly due to an increase in product acquisition costs.
Comparable store sales were down 5 percent in the Americas and Asia-Pacific while increasing 10 percent in Japan and 2 percent in Europe.
Looking ahead for the full year, the company now expects EPS in the range of $3.55 to $3.70 from prior expectations of $3.70 to $3.80. Net sales growth is currently forecast at 6 percent to 7 percent, down from 7 percent to 8 percent growth expected earlier. Analysts expect EPS of $3.64 on sales of $3.87 billion.
TIF shares closed Friday's regular trading at $58.50. The stock has been trading between $49.72 and $80.99 over the past year.