Tiffany & Co. (NYSE:TIF) reported before the bell on Thursday that its third quarter earnings fell 30%. This came on weaker margins, thanks to higher costs in precious metals and diamonds.

The company missed estimates and slashed its full-year forecast again. Earnings per share are now expected between $3.20 to $3.40 on 5% to 6% new sales growth. This comes after its previous $3.55 to $3.70 on 6% to 7% growth estimates.

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Analysts now have a $3.59 per share forecast.

For the third quarter, Tiffany & Co. (NYSE:TIF) reported a $63.2 million profit (49 cents per share), versus $89.7 million (70 cents per share) in the previous year. Sales increased 3.8% (5% excluding currency impacts) to $853 million.

Analysts had estimated 63 cents per share earnings on $859 million in revenues.

In a statement by Tiffany Chairman and CEO Michael J. Kowalski, he said via the Associated Press that Tiffany had expectations that its third quarter would be impacted by the continuous economic softness and previous year comparisons. He added that the company’s 54.5 percent gross margin rate–down from the previous year’s 57.9 percent–had been more fragile than anticipated, while its tax rate came in greater than expected.

Pre-market traders responded negatively as shares tanked 10.6% to $57. In the last 12 months, the stock has fallen 5.2%.

Global Economy Contributes to Declines

One of the contributing factors to Tiffany’s disappointing third quarter was the weak global economy. The company isn’t alone in facing this challenge and it has been a trend since last year’s holiday season. While Tiffany & Co. (NYSE:TIF) faced tighter margins, it did see some sales traction in Europe and in the U.S.

Kowalski said that looking ahead, the company will remain cautious in its short-term outlook for conditions in the global economy but over the holiday season, it should see improving numbers from new products and new stores.

This time of year is key for retailers as it can provide up to 40 percent of a store’s annual revenue, reported the Associated Press.

On a worldwide review, including in the Americas, same-store sales had been flat in the third quarter, but they did increase 1% on a currency neutral basis, reported Dow Jones. Asia-Pacific reported a 3% fall or a 4% decline for a currency neutral basis.

Europe and Japan both saw a 2% increase with Europe’s same-store sales rising 8% on a constant currency basis, while Japan’s jumped 5%.

Tiffany & Co. (NYSE:TIF) noted that its other sales increased 73 percent, while it changed five United Arab Emirates stores from independently-run distributions to stores overseen by the company.

Deutsche Bank analysts  believe that there isn’t a major read across to other luxury names, as TIF’s weakness and guide-down are likely driven more my company-specific factors.

For example, they believe that the company has specific positioning issues in Asia, and the poor silver jewelry sales further confirm the difficulty Tiffany is having with more entry-level price point mix, as the aggressive price increases from the last few quarters have, for the most part, priced the brand out of its customers’ reach.

At the end of the third quarter, the company had 272 stores.