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Tiffany is a component of 21, a new index of 21 components designed to be a leading indicator of the economy's direction for the rest of the year and beyond.

Second-quarter earnings at


(TIF) - Get Tiffany & Co. Report

grew by more than 25% on strong sales, the company said Wednesday.

In its quarter ended July 31, the jewelry store chain earned $41.1 million, or 28 cents a share, on $442.5 million in sales. That compares with the second-quarter last year, when Tiffany earned $32.7 million, or 22 cents a share, on revenue of $374.4 million.

The company's results blew by Wall Street's expectations. Analysts surveyed by Thomson First Call were expecting Tiffany to earn 24 cents a share on $422.5 million in sales.

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In a statement, Tiffany reaffirmed its full-year guidance for earnings per share of $1.33 to $1.38. Analysts are currently expecting the company to earn $1.35 this fiscal year.

Tiffany's results in the second quarter benefited from strong sales worldwide. The company's same-store sales, which compare the results at outlets open form more than one year, increased 8% in the quarter. Excluding the effects of currency changes, overall sales increased 16% in the quarter.

At the company's U.S. stores, overall sales in the second quarter increased 14% to $213 million, while same-store sales rose 9%. Meanwhile, overall revenue from the company's international stores increased 14% to $169 million, on comparable-store sales growth of 13%.

The company's catalog and Internet operations also performed well in the quarter, as sales increased 21%. That was offset somewhat by a mere 2% gain in business sales.

While the company saw substantial success with its sales, it had mixed results with its expenses. Its gross profit margin, the difference between what a company charges customers for its products and those products cost the company to buy or manufacturer, fell 1.1 percentage points in the quarter. Despite the decline, the company's gross margin still came in at a healthy 57.6% of sales.

Company officials attributed the decline in part to lower profit margins at its recently acquired Little Switzerland chain.

While the company's top-line costs increased, its operating costs fell in the quarter. Marketing, general and administrative expenses declined 77 basis points from the year-ago period to 42.15% of sales.