Tiffany Q2 profit falls 30%, beats Street

New York City Tiffany & Co. said Friday that its second-quarter profit fell 30% on declining sales, but the results beat Wall Street expectations.

The luxury retailer also raised its full-year earnings guidance, saying its August sales trends are meeting expectations.

"While economic and retail conditions remain challenging, we were encouraged to see many stores achieving either smaller year-over-year rates of sales declines or modest sales growth compared with the past two quarters," chairman and CEO Michael Kowalski said in a statement.

The company earned $56.8 million for the period ended July 31, down from $80.8 million a year ago.

Sales fell 16% to $612.5 million, but still topped analysts’ estimate of $602.1 million.

Same-store sales at U.S. stores dropped 27%. At its flagship New York store, sales were off 30%.

Combined Internet and catalog sales for the United States fared a bit better, posting an 8% decline.

Overseas performance was slightly better, as Tiffany reported sales for the Asia-Pacific region slid 1.0% and European sales were down 4.0%.

According to Kowalski, the company will expand its store base at a modest pace this year due to the recession, but still expects to increase the number of company-run stores by approximately 6%.

"We believe the current environment provides opportunity for significant gains in market share," he said.

Tiffany had 211 of its namesake stores and boutiques at quarter's end.