Tiffany & Co. (TIF)

Tiffany (TIF - Analyst Report) is well positioned to deliver robust sales and earnings growth through leveraging capital investments made over past several years in distribution, manufacturing and diamond sourcing processes. The company, which holds a significant position in the world jewelry market, is poised to benefit from its increased geographic diversification once the economy rebounds.

However, to weather the downturn, Tiffany is concentrating more on smaller size store formats that offer selected collections of lower priced higher-margin products, which in turn enhance store productivity.

Further, to protect its shrunken revenue base, the company has been paring its cost structure by reducing its headcount and trimming capital expenditure with fewer store openings. Consequently, our Outperform rating on the stock persists.