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With four successive quarters of better-than-expected bottom-line results, it seems Tiffany & Co. (TIF - Analyst Report) has positioned itself favorably. The company’s fiscal 2013 earnings guidance is also encouraging. With the economy showing signs of recovery, we expect Tiffany’s robust performance to continue going forward.

Shares of this jewelry maker amassed a year-to-date return of 53.6% and closed at $89.31 per share. Also, the stock rose 1.5% after the company posted robust-third quarter fiscal 2013 results on Nov 26.  

Rising Sales Trend

Tiffany’s global net sales grew 7% in the third quarter, following 4% rise in the second quarter, and 9% in the first quarter of fiscal 2013. Also, sales grew 4% in the fourth quarter of fiscal 2012.

Moreover, if we look back to the third, second and first quarters of fiscal 2012, Tiffany had posted sales growth of 4%, 2% and 8% respectively.

Bottom Line Ahead of Zacks Consensus Estimate

Tiffany continues its earnings streak by beating the Zacks Consensus Estimate in the trailing four quarters. The company posted a positive earnings surprise of 25.9% in the third quarter, 12.2% in the second quarter, 32.1% in the first quarter of fiscal 2013, and 2.2% in the fourth quarter of fiscal 2012.

Upbeat Guidance

Given the better-than-expected third-quarter results, Tiffany raised its fiscal 2013 guidance. The company now projects fiscal 2013 earnings between $3.65 and $3.75 per share, up from the previous forecast of $3.50 to $3.60.

Tiffany now expects total net sales growth in mid single digits for fiscal 2013. In constant currencies, total net sales are projected to increase in the high single digits.

Rising Estimates

Following Tiffany’s third-quarter results, the Zacks Consensus Estimate has shown an upward trend.

The Zacks Consensus Estimate for the fourth quarter of fiscal 2013 rose 1.3% to $1.54 per share in the last 30 days. For fiscal 2013 and 2014, the Zacks Consensus Estimate rose 5.0% and 4.4% to $3.79 and $4.27, respectively, over the same time frame.

Our Take

We believe that Tiffany, which competes with Signet Jewelers Limited (SIG - Snapshot Report), Movado Group, Inc. (MOV - Snapshot Report) and Zale Corporation (ZLC - Snapshot Report), is well poised to support sales and earnings growth in the long run by leveraging capital investments made over the past several years in distribution, manufacturing and diamond sourcing processes. Tiffany’s long-term growth prospects remain encouraging given its new product launches and focus on enhancing its geographic reach through store expansion program. It remains committed to achieve long-term objectives of at least 15% earnings growth and a 10% to 12% sales increase.

Currently, Tiffany carries a Zacks Rank #2 (Buy).

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