Tiffany & Co. again cut its earnings outlook, citing holiday-season sales that cratered amid a harsh economic environment.

The luxury jeweler said sales at stores open at least a year tumbled 24% in November and December from the year-earlier period, marked by a 35% plunge in the U.S. Total sales declined 21% to $687.4 million.

Chief Executive Michael Kowalski said the worsening economic conditions were apparent as customers spent cautiously across the entire range of Tiffany’s jewelry categories and prices. “We believe these conditions will continue well into 2009,” he added.

Tiffany reduced its fiscal-year outlook for earnings excluding special items to between $2.25 and $2.30 a share. In November, the jeweler had lowered the projection to a range of $2.30 to $2.50. Tiffany expects net sales of $2.85 billion, about a 3% decline from a year earlier and below the company’s previous forecast of flat to down 2%.

Mr. Kowalski said the company is being cautious but will continue to pursue growth opportunities to strengthen its presence world-wide and boost sales. Cost cuts are also possible; the company said in November that it planned to reduce staff.