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We reiterate our long-term Neutral recommendation on Tiffany & Company (TIF - Analyst Report), the designer, manufacturer and retailer of fine jewelry, with a target price of $83.00, following its better-than-expected first-quarter fiscal 2013 results attributable to a surge in demand in the Asia-Pacific region. The company also currently holds a Zacks Rank #3 (Hold).

Why Reiterate?

Tiffany delivered the second consecutive quarter of positive earnings surprise - after 4 straight quarters of lower-than-expected earnings - on May 28, wherein earnings of 70 cents a share surpassed the Zacks Consensus Estimate of 53 cents by 32.1%, and rose 9.4% from the prior-year quarter.

Tiffany’s net sales of $895.5 million climbed 9% from the year-ago quarter, and came ahead of the Zacks Consensus Estimate of $862 million.

We believe Tiffany is well positioned to support robust sales and earnings growth in the long run by leveraging on capital investments made over the past several years in distribution, manufacturing and diamond sourcing processes. Moreover, with nearly half of the total sales generated internationally, we believe that the company is well diversified from a regional perspective as well. Tiffany’s long-term growth prospects remain encouraging, given its new product launches and focus on enhancing its geographic reach through store expansion program.

Tiffany remains committed to attain long-term objectives of at least 15% earnings growth and a 10% to 12% sales increase annually. Management now projects earnings per share to mark an increase of 6% to 9% and total net sales growth in the mid-single digits in fiscal 2013.

While these create a positive bias on the stock, the near-term headwinds, such as soft sales trends in the Americas, effects of a depreciated Japanese yen on results, and sluggishness witnessing in the silver business neutralize it.

The company’s customers remain sensitive to macroeconomic factors including interest-rate hikes, increase in fuel and energy costs, credit availability, unemployment levels, and high household debt levels, which may negatively impact their discretionary spending, and in turn the company’s growth and profitability.

Other Stocks to Consider

The stocks worth considering in the non-food retail, wholesale sector include Lumber Liquidators Holdings Inc. (LL - Snapshot Report), Bon-Ton Stores Inc. (BONT) and Conn’s, Inc. (CONN - Snapshot Report) all of which carry a Zacks Rank #1 (Strong Buy). These companies are expected to continue with their upbeat performances.

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