Tiffany struck a cautious note on Friday about 2014, giving a profit forecast that was below estimates despite its projection that net worldwide sales would rise by a high-single digit percentage this year.
The company, which has bet its growth on emerging markets such as China and Russia, is likely being conservative because of growing economic and political uncertainty in some markets, and still sluggish growth of its less expensive silver jewelry in the United States, analysts said.
Tiffany, known for its blue boxes and Fifth Avenue flagship store in Manhattan, forecast a profit of $4.05 to $4.15 per share this fiscal year. Wall Street analysts projected $4.28 a share, according to Thomson Reuters I/B/E/S.
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After a painful 2012, when Tiffany lowered its bullish profit forecasts four times, the company has grown more cautious in its projections.
Customers carry Tiffany & Co. shopping bags outside the company's flagship store in New York, March 18, 2014.Craig Warga | Bloomberg | Getty Images
But this time, growing uncertainty in emerging markets was likely a factor too, said Edward Yruma, a KeyBanc Capital Markets analyst.
"They are being prudent given what's going in Russia and China," Yruma said.
The New York-based jewelry chain reported a 6 percent increase in sales at stores open at least a year for the fourth quarter ended Jan. 31.
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The company reported growth in all regions, including the United States, where it has struggled to find the right mix of expensive jewelry and more affordable silver items that generate one-quarter of sales.
But U.S. sales outside of its Manhattan flagship were slower, suggesting its less expensive jewelry, items that cost less than $500 but offer a higher profit margin, are taking some time to catch on with frugal shoppers, said Edward Jones analyst Brian Yarbrough.
Tiffany said that companywide, its fine jewelry led its sales growth.