Shares of Tiffany & Co. (TIF) slipped Friday amid declines in the jewelry sector, after J.P. Morgan said management expects fiscal fourth-quarter U.S. comparable same-store sales to be flattish.

Jewelry sales have tumbled in the past year as consumers have veered away from stores during the recession. To cope with depressed sales, some bigger jewelry companies have cut inventory and their work forces as some mom-and-pop stores have shut their doors completely.

In recent trading, shares of the luxury jeweler dropped 2.4% to $35.90. The stock earlier hit an intraday low of $35.64. The decline comes after J.P Morgan analyst Brian Tunick wrote a note to clients, highlighting his Thursday meeting with the company's management.

Tunick, who rates the stock neutral, said based on the two-year comparable run rate, Tiffany management expects U.S. comps to be flattish in the fourth quarter and has embedded that in full-year guidance.

In August, Tiffany indicated sales trends were improving, though it projected a "high teens" percentage sales decline for the fiscal year at its U.S. stores open at least a year, and a "mid-teens" decline in sales overall at its stores in the Americas. The company, at the time, also raised its forecast for the year, to earnings of between $1.65 and $1.75 a share on a worldwide sales decline of 10%.

Tunick explained the company's fourth-quarter estimates are likely a result of a hit last holiday season for keeping merchandise at full price, while other luxury players offered promotions amid macroeconomic weakness.

On the contrary, he said there's a possibility the company will increase its market share in the U.S. after an estimated 1,500 jewelry stores closed their doors this year. Another positive for U.S. sales would be that Wall Street bonuses and tourism are seen to remain key drivers in the fourth quarter.

Despite those benefits, the firm said it is less optimistic and is modeling that U.S. sales in the fourth quarter will be down 5% to 7%.

Longer term, Tunick expects Tiffany to further expand its global presence, driven by the strength of its brand as management plans to double its European store base. He also believes the company has "significant opportunity" in the Asia Pacific region, where the company believes it could grow its eight stores in mainland China to 25 to 30 locations.

Other jeweler stocks were also down. Declining more than any competitor, Zale Corp. (ZLC) shares fell 3.7% to $7.02. It's move erased Thursday's 2.5% gain. The volatile stock has continued to fluctuate as investors await the company's fourth-quarter results that have been delayed twice as it works to finalize the review of its accounting.

Meanwhile, shares of Blue Nile Inc. (NILE) shares were flat at $60.07, while Signet Jewelers Ltd. (SIG) shares were down less than 1% at $25.14.