Tiffany & Company (TIF – Analyst Report) came out with third-quarter fiscal 2014 results, wherein earnings of 76 cents a share missed the Zacks Consensus Estimate by a penny. The company generated net sales of $959.6 million that also fell short of the Zacks Consensus Estimate of $970 million due to sluggish demand in Japan. However, this Zacks Rank #3 (Hold) stock maintained its earnings forecast for fiscal 2014.

Tiffany & Co – Earnings Surprise | FindTheBest

The bottom line jumped 4.1% from 73 cents a share earned in the year-ago quarter, alleviating investors’ concern to some extent. A 5.3% increase in sales and an improved gross margin supported the bottom line. Sales growth across the Americas and Europe drove the top line. In constant currencies, net sales jumped 7%, whereas comparable-store sales (comps) climbed 4%.

Shares of this jewelry retailer rose roughly 4% during the pre-market trading session.

By geographic segments, sales in the Americas grew 10% to $459 million, while comps rose by an equivalent percentage. Sales in the Asia-Pacific region climbed 2% to $243 million but comps declined 3%. Japan sales dropped 12% to $113 million and comps fell 13% and sales in Europe jumped 9% to $114 million but comps remained flat. Other region sales surged 28% to $30 million whereas comps grew 35%.

In constant currencies, sales in the Americas rose 11%, while comps grew by a similar percentage rate during the quarter. Sales in the Asia-Pacific region grew 2% but comps declined 3%. Sales in Japan fell 5%, while comps decreased by 6%. Europe sales surged 10%, whereas comps increased 2%.

Gross profit for the quarter increased 9.9% to $570.9 million, while gross margin expanded 250 basis points to 59.5% due to lower product cost, increase in prices and a profitable sales mix. Operating income jumped 9.7% to $168.5 million, while operating margin increased 70 basis points to 17.6%. The margin improvement was driven by higher gross margin.