Tiffany

(TIF) - Get Report

narrowed its expected range of 2005 earnings Tuesday, pulling the top end below Wall Street forecasts despite a solid holiday sales performance.

The jewelry retailer, which saw strong demand around the world but was also thought to be hurt by a late-December transit strike in New York, expects to earn $1.60 to $1.62 a share for the year ending this month. The forecast assumes "no meaningful change in sales or margin trends in January."

Analysts surveyed by Thomson First Call are forecasting earnings of $1.64 a share for 2005. Tiffany previously forecast full-year earnings of $1.55 to $1.65 a share.

Tiffany sees 2006 earnings of $1.77 to $1.82 a share and sales growth of about 10%. Analysts were forecasting earnings of $1.84 a share in 2006.

Tiffany said total net sales for the two months ended Dec. 31 were $712.0 million, up 6% from a year ago. On a constant-currency basis, net sales rose 9% in the two months while comparable-store sales rose 6%.

In the U.S., retail sales rose 8% to $386 million "due to an increase in the average amount per transaction." U.S. comparable-store sales rose 6% from a year ago, comprising an 8% increase in branch-store comps and a 1% decline in New York flagship store sales.

International retail sales fell 1% to $240.8 million, but rose 8% on a constant-currency basis, reflecting a 7% rise in total Japan sales. Using constant currency, international comps rose 6%.

"We were extremely pleased that holiday sales growth was broad-based geographically and in various jewelry categories. Diamond jewelry sales continued to be especially strong," Tiffany said.