NEW YORK — Tiffany & Co. had a strong holiday season, but disappointing comparable-store sales in Japan prompted Goldman Sachs to lower its 2004 full-year earnings forecast for the venerable jeweler.

Tiffany said on Thursday that for the period from Nov. 1 to Dec. 31, net sales rose 18 percent to $601.2 million over the prior-year period. At a constant exchange rate, however, net sales rose a more modest 14 percent and comp-store sales gained 10 percent. The total sales growth exceeded the firm’s expectations, leading Tiffany to increase its fourth-quarter earnings estimate.

“We expect net earnings in the fourth quarter ending Jan. 31 to be in a range of 68 to 71 cents per diluted share, versus year-ago earnings of 60 cents per diluted share and our previous expectation of 64 to 69 cents,” chairman and chief executive officer Michael Kowalski said in a statement.

Kowalski noted that results in Japan continued to be disappointing, primarily as a result of declining unit sales of silver jewelry. Comp-store sales in Japan declined 7 percent, while total retail sales declined 3 percent.

While she maintained her fourth-quarter forecast of 70 cents a share, Goldman Sachs analyst Adrianne Shapira cautioned that the continuing sales decline in Japan would limit the firm’s future EPS growth and, as such, lowered her full-year 2004 estimate to $1.60 from $1.65.

“While the strong luxury rebound is driving impressive U.S. comps, with particular strength in the company’s New York flagship, weakness in Japan and continued expense growth is capping the EPS recovery,” she said in a statement. “Investors had anticipated a sharper EPS recovery, therefore stock could come under pressure in the short term.”

This story first appeared in the January 9, 2004 issue of WWD. Subscribe Today.