Tiffany’s FY2011 results came in lower than expected this morning mainly because of the company’s underperformance in 4Q. Net income fell 1.6% YoY to $178.4m, or $1.39 per share. The financial situation in Europe explains a large part of this underperformance. For luxury retailers, European sales tend to split 50/50 between local customers and customers who travel to Europe. For Tiffany, however, the split is a little different and purchases from local customers account for up to 75% of their European sales. So it’s not surprising the slowing down in Europe economy dented Tiffany’s earnings. Tiffany also did not expand as quickly as it hoped in China. It only opened 2 new stores in 2011, although the 16 stores in China brought in 12% of its global sales in FY2011. Management provided FY2012 guidance aiming for 10% net sales growth, 16%-19% profit growth and 24 new stores worldwide. That is the reason why the stock gave us the biggest rally in the past 6 months by zooming more than 6% today. Management gave us an upbeat tone on the recovery of luxury consumption on the East Coast of the US as well as Europe. So do you buy Tiffany? I like that store, if for nothing else, it’s fun spot to visit in New York. There is a sterling silver section with modestly priced pieces, so even when your name is not Newt Gingrich, you can still take something out with you. Please send in your comments to our show when you get a chance or tweet me @juliasun_onair. I’m Julia Sun for the Financial News Network.