Tiffany & Co. (NYSE: TIF) reported second quarter 2014 results before markets opened Wednesday. The luxury goods company reported diluted earnings per share (EPS) of $0.96 on revenues of $992.93 million. In the same period a year ago, Tiffany reported adjusted EPS of $0.83 and revenue of $925.88 million. Second-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.85 and $987.88 million in revenue.

Worldwide same-store sales rose 3%, including a jump of 8% in the Americas and 7% in Asia-Pacific, a 1% rise in Europe, and a decline of 13% in Japan. The drop in Japan followed a first-quarter increase of 20% that preceded the imposition of a consumption tax in Japan that took effect on April 1.

Net sales rose 7% year-over-year and net profits were up 16% in the second quarter. The company used the occasion to raise its guidance. Full-year EPS guidance has been lifted from a prior range of $4.15 to $4.25 to a new range of $4.20 to $4.30. The estimate is based on net sales rising in the high-single-digits, opening 10 new stores and closing three others, and free cash flow of at least $400 million, among other assumptions.

The consensus full-year estimates call for EPS of $4.29 on revenues of $4.39 billion. For the third quarter, the consensus estimates are EPS of $0.80 on revenues of $984.32 million.

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Second-quarter gross margin rose from 58.2% to 59.9% year-over-year and operating margins rose to 21%. This is good, but not as good as the 60.5% gross margin in the fourth quarter of 2013. Once again Tiffany was able to increase prices and maintain sales leverage on fixed costs due to the strong increase in worldwide net sales.

The CEO said:

These healthy second quarter results reflected solid sales growth in our stores, particularly in the Americas and Asia-Pacific regions. In addition, an improved gross margin was an important contributor to the earnings growth.

Investors are likely to be satisfied, but not thrilled by the report from Tiffany. The increase in the company’s forecast EPS is just a penny higher than the consensus estimate. The EPS and revenue beats were solid, but the bar had been set pretty low.

Shares were up about 1.8% in premarket trading this morning, at $102.55 in a 52-week range of $73.63 to $103.38. Thomson Reuters had a consensus analyst price target of around $105.00 before the results were announced.

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