Tiffany & Co. Is a Timeless Investment

by Will Ashworth | August 27, 2014 2:53 pm

Tiffany & Co. (TIF[1]) delivered a sparkling second-quarter earnings report[2] Wednesday morning that easily beat analyst expectations.

Tiffany & Co. TIF stock

When it comes to luxury retail, hardly anyone with the exception of Michael Kors (KORS[3]) seems to be doing nearly as well … so what makes Tiffany & Co. better than most?

Well, there are many reasons for Tiffany stock’s strong performance, some of which are company-specific and others have more to do with competitor weaknesses.

Ultimately, successful retail is about executing a plan to near-perfection. To use a sports vernacular, Tiffany & Co. is currently operating in the zone, which makes it very hard to stop. So while Tiffany stock might be trading within 5% of its all-time highs, management optimism suggests there are future gains in the offing.

A few reasons to like TIF right now:

Bottom Line

While KORS is still experiencing significant growth, others such as Coach (COH[8]) aren’t faring nearly as well. Tiffany stock isn’t setting growth records by any means … but then, it doesn’t have to with timeless tradition and near-60% gross margins on its side.

Walk in to any Tiffany store, and you get the sense that there’s something available for every price point, making it accessible to all while at the same time not appearing to be tacky or gauche unlike some luxury retailers that will remain nameless.

It’s not easy pulling this off, yet Tiffany & Co. makes it seem effortless.

You can’t put a price on good retail execution.

As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.

Endnotes:

  1. TIF: /stock-quotes/TIF-stock-quote/
  2. second-quarter earnings report: http://www.cnbc.com/id/101949309#.
  3. KORS: /stock-quotes/KORS-stock-quote/
  4. 3% comparable-store sales growth in the second quarter: http://www.sec.gov/Archives/edgar/data/98246/000009824614000206/ex991newsrelease08272014.htm
  5. Francesca Amfitheatrof: http://www.elle.com/news/fashion-accessories/tiffanys-new-gem
  6. SWGAY: /stock-quotes/SWGAY-stock-quote/
  7. $300 million outlook: http://www.sec.gov/Archives/edgar/data/98246/000119312513122446/d508524dex991.htm
  8. COH: /stock-quotes/COH-stock-quote/

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