Tiffany (NYSE:TIF) had some mixed messages about its holiday sales to share on Tuesday, though investors didn't seem to mind. Perhaps they ought to wonder whether Tiffany's shares are as oh-so-pricey as its wares.

Same-store sales at Tiffany in November and December increased 6%, despite a 1% sales drop at its flagship New York City store -- the setting for Breakfast at Tiffany's and an American cultural icon. (The New York City transit system's ill-timed strike probably didn't help.) Total sales at Tiffany also increased by 6%.

For investors who have been following Tiffany -- if you need to catch up, read about Tiffany's most recent earnings announcement -- one relevant element is its performance in Japan. Last quarter, sales in that country were flat, but it seems that Japanese sales made a much-hoped-for recovery during November and December, rising 7%.

When it comes to Tiffany's other concepts, Iridesse (its retail chain focusing on pearl jewelry) contributed to the company's sales increase, while Little Switzerland's sales were flat year over year.

Meanwhile, Tiffany narrowed its guidance for fiscal 2005, paring down the high end of its guidance by $0.03 per share for an estimated projection of $1.60 to $1.62 per share. Investors didn't seem to mind, bidding shares up by a few percentage points despite the stock's trailing P/E of 18.

The holidays were tough for many retailers, with gadgets topping consumers' shopping lists (though it seems to me that during the holidays, there's always room for jewelry). In the luxury sector, many Foolish investors are probably also anticipating word of Blue Nile's (NASDAQ:NILE) holiday sales, since that company targets a similarly upscale demographic in selling its diamond jewelry over the Internet.

Tiffany is obviously a solid stock and a venerated business. The sales figures do look decent, and investors should note the company's improving Japanese performance, among other positive signs. While it seems perfectly reasonable to believe that Tiffany could be a long-term jewel in anyone's portfolio, recent concerns and the narrowing of its earnings projections might prompt investors to think twice before buying into this company's high-priced luxury.

For more on Tiffany, read the following Foolish gems:

Both Gardner brothers have recommended Blue Nile -- David for Motley Fool Rule Breakers and Tom for Motley Fool Hidden Gems . For more information on our entire suite of newsletters, click here.

Alyce Lomax does not own shares of any of the companies mentioned.