New York City-based Tiffany & Co. looks promising, backed by its significant position in the global jewelry market due to its distinctive brand appeal and robust third-quarter fiscal 2016 results.

Driven by these factors, this Zacks Rank #3 (Hold) company hit a 52-week high of $84.40 yesterday, though it eventually closed lower at $80.60. Moreover, its share price has surged nearly 30% in the past six months, notably outperforming the Zacks Categorized Retail–Jewelry Stores industry growth of 9.9%. Also, the stock has a Momentum Score of ‘A’, which highlights its inherent strength.

Tiffany posted the second straight quarter of positive earnings surprise, when it reported third-quarter fiscal 2016 results. The company recorded quarterly earnings of 76 cents a share that beat the Zacks Consensus Estimate of 67 cents and increased 9% from the year-ago period. Net sales came in at $949.3 million, up 1% from $938.2 million recorded in the prior-year quarter and also ahead of the Zacks Consensus Estimate of $923 million. (Read more: Tiffany Beats on Q3 Earnings & Sales; View Intact)

Results were mainly backed by positive sales performance in China, Japan and the Asia-Pacific region. Further, gross margin expanded 80 basis points to 61% during the quarter on account of a decline in product input costs and changes in product sales mix.

Despite stellar third-quarter results, management kept its fiscal 2016 guidance intact. The company now anticipates earnings per share for fiscal 2016 to decrease by a mid-single-digit percentage from the prior year. Tiffany also reaffirmed its expectation of fiscal 2016 worldwide net sales to decline at a low-single-digit percentage.

Tiffany is concerned about the global economic scenario that remains highly volatile given the upcoming elections in Hong Kong next year and the emerging economic environment in the European markets post Brexit. The company also hinted that the proximity of its Fifth Avenue Flagship Store to the Trump Tower has been leading to a lower footfall due to tight security measures there. Management remains concerned that the persistence of this situation will affect sales in the holiday season. Further, a mature domestic market, foreign currency headwinds and cautious consumer spending continue to pose concerns.

Nonetheless, we believe that the company’s omni-channel platform, store expansion programs, tapping of new markets and venturing into new revenue generating avenues such as watches may help improve performance, going forward.

Stocks that Warrant a Look

Some better-ranked stocks in the broader retail sector include Movado Group, Inc. (MOV Quick QuoteMOV - Free Report) , The Children's Place, Inc. (PLCE Quick QuotePLCE - Free Report) and Christopher & Banks Corporation .

The Children's Place, with a long-term earnings growth rate of 10.3%, has surged nearly 89.3% year to date. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Movado Group, a Zacks Rank #1 stock, has gained 42.8% in the past six months.

Christopher & Banks Corporation, which carries a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 15%. The stock has jumped roughly 29.9% in the past one year.

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