Tiffany & Co. (NYSE: TIF) reported third-quarter 2014 results before markets opened Tuesday morning. The luxury goods company posted adjusted diluted earnings per share (EPS) of $0.76 on revenues of $960 million. In the same period a year ago, Tiffany reported adjusted EPS of $0.73 on revenue of $911 million. Third-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.77 and $968.86 million in revenue.

Worldwide same-store sales rose 6%, including a jump of 11% in the Americas and 2% in Europe, and declines of 3% in Asia-Pacific, and 6% in Japan. The drop in Japan followed a second-quarter drop of 13%. Japan sales rose 20% in the first quarter of this year, ahead of a consumption tax that took effect on April 1st.

Net sales rose 5% year over year but net profits were down 60% on a GAAP basis in the third quarter as the company took a $0.47 per share charge related to early payment of long-term debt.

Full-year EPS guidance was reiterated at $4.20 to $4.30, excluding the debt-extinguishment charge in the third quarter. The estimate is based on net sales rising in the mid- to high-single-digits, opening 10 new stores and closing 2 others, and free cash flow of at least $400 million, among other assumptions. The estimate of new sales is changed from last quarter when Tiffany said it expected full-year net sales to rise by the high-single digits.

The consensus full-year estimates call for EPS of $4.34 on revenues of $4.36 billion. For the fourth quarter, the consensus estimates are EPS of $1.65 and revenues of $1.39 billion.

Third-quarter gross margin slipped slightly sequentially from 59.9% to 59.5% and operating margins slipped from 21% to 17.6%. In the fourth quarter of 2013, Tiffany’s gross margin was 60.5% and it has been lower in every subsequent quarter, although in the first and second quarters of this year it improved year over year.

The CEO said:

We were pleased with overall sales performance, especially in light of economic and geopolitical challenges around the world.

Investors are likely to react indifferently to Tiffany’s third-quarter results. Earnings and revenues were light and the forecast is a little weaker, but the company could bust a big holiday season and fourth quarter. If Tiffany turns in a fourth quarter like this one, however, the stock will likely get a beating.

Shares are down about 0.1% in pre-market trading Tuesday morning, at $104.87 in a 52-week range of $80.38 to $105.66. Thomson Reuters had a consensus analyst price target of around $107.50 before today’s results were announced.

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