NEW YORK — Apparently the Japanese lost their taste for silver, or at least Tiffany’s.

Rising costs and continued weakness in the Japanese market dulled the luster of earnings for Tiffany & Co. in the second quarter.

Earnings for the New York-based jewelry giant slid 11 percent to $36.6 million, or 25 cents a diluted share, for the three months ended July 31. Results fell far short of Wall Street analysts’ consensus estimate of 29 cents a share. Comparatively, the company reported earnings of $41.1 million, or 28 cents, in the year-ago period.

“Due to several identifiable factors, this performance was admittedly worse than the very slight earnings increase that we had expected,” said Mark Aaron, vice president of investor relations, on a company conference call.

Sales, buoyed by rising U.S. sales, increased 7.7 percent to $476.6 million during the period, compared with sales of $442.5 million in the same period a year ago. Sales also received a 2 percent bump owing to the effects of a weak U.S. dollar.

“Japan’s results continued to suffer from weak silver jewelry sales,” said Michael J. Kowalski, chairman and chief executive officer, in a statement.

According to the company, sales in Japan fell 3 percent and comparable-store sales fell 4 percent. However, both sales and comp figures have a 6 percent benefit related to the impact of currency exchange.

Domestic sales continued to lead the company, rising 11 percent to $236.8 million. As seen at other high-end retailers, the affluent consumers’ appetite for luxury goods continued to drive growth.

“We saw a decline in sales in units of products below $500, but conversely saw double-digit growth in sales and units in every higher-priced strata we analyzed, with very healthy growth in sales over $10,000 and over $50,000,” said Aaron.

Cost of sales rose 190 basis points to $211.3 million, or 44.3 percent of sales, compared with $187.5 million, or 42.4 percent of sales, in the year-ago period.

Banc of America Securities analyst Dana Cohen downgraded the company to a “neutral” rating following earnings, citing the firm’s heavy dependence on the U.S. market and the potentially adverse affects on the wealthy if Sen. John Kerry wins the White House in November.“Keep in mind that, at this point, Tiffany requires acceleration in Japan and no slowdown in the U.S. to make money, Cohen said. “We are not totally writing off the former, although clearly the company’s track record in Japan over the last few years is quite spotty.”

For the first half, earnings were essentially flat, falling 0.1 percent to $76.9 million, or 52 cents a share, against earnings of $77 million, or 52 cents, in the year-ago period.

Sales grew 11.4 percent to $933.6 million from $838.3 million, including a currency exchange benefit of 3 percent.

“Our sales growth continued to be fueled by sales of higher price-point jewelry,” said Aaron. “Specifically, engagement jewelry continued to post above-average sales growth in the U.S. and modest growth in Japan.”

The company lowered expectations for the year, anticipating earnings per share of between $1.55 and $1.60.

— R.T.

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