Tiffany & Co struck a cautious note today about 2014, giving a profit forecast that was below estimates despite its projection that net worldwide sales would rise by a high-single digit percentage this year.

The company has bet its growth on emerging markets such as China and Russia.

It is likely being conservative because of growing economic and political uncertainty in some markets, and still sluggish growth of its less expensive silver jewellery in the US, analysts said.

Tiffany, known for its blue boxes and Fifth Avenue flagship store in Manhattan, forecast a profit of $4.05 to $4.15 per share this fiscal year. Wall Street analysts projected $4.28 a share, according to Thomson Reuters.

After a painful 2012, when Tiffany lowered its bullish profit forecasts four times, the company has grown more cautious in its projections.

The New York-based jewellery chain reported a 6% increase in sales at stores open at least a year for the fourth quarter ended January 31.

The company reported growth in all regions, including the US, where it has struggled to find the right mix of expensive jewellery and more affordable silver items that generate one-quarter of sales.

But US sales outside of its Manhattan flagship were slower, suggesting its less expensive jewellery, items that cost less than $500 but offer a higher profit margin, are taking some time to catch on with frugal shoppers.

Tiffany said that companywide, its fine jewellery led its sales growth. 

Last year, Tiffany hired a new design director, Francesca Amfitheatrof, to improve its lower-price assortment.

Comparable store sales rose 4% in Asia, excluding Japan, led by gains in China, where Tiffany has been focusing much of its expansion. Sales had been tepid in the region in November and December, suggesting an uptick in January.

In Europe, sales rose 2% while in Japan comparable sales rose 8%, excluding a sharp drop in the value of the yen. Overall sales rose 5.1% to $1.3 billion.

The upscale New York-based jeweller reported a loss of $103.6m, or 81 cents per share, in the fourth quarter, due primarily to losing an arbitrations ruling against Swatch Group. 

A year earlier, it recorded a profit of $179.6m, or $1.40 a share.

Excluding the arbitration loss, which wiped out more than half of its 2013 profit, Tiffany earned $1.47 per share in the quarter, 5 cents below Wall Street expectations.