On a constant-exchange-rate basis, net sales rose a smaller 11%, and worldwide comparable store sales rose 4%. Net earnings increased 9% to $40.1 million, or 27 cents per diluted share, from $36.8 million, 25 cents per share.

U.S. retail sales increased 14% to $243.4 million, with most growth coming from the amount spent per transaction. "There was solid unit increases in engagement and other higher-price jewelry," says vice president of investor relations Mark Aaron. "From a price stratification perspective, we were pleased to see sales and transaction growth in every price strata, with even a single digit increase in the entry-level strata below $500. However, the most meaningful growth was in diamond jewelry at higher price levels."

Comparable store sales rose 11%, both for the company's flagship New York store (most sales growth came from tourist) and branch locations. Four stores have opened in the past year and are not counted in the comparable store sales, and four more are scheduled to open in 2005.