Tiffany Results Strong Across Regions and Categories

We are keeping our fair value estimate of $92 per share for wide-moat

Second-quarter revenue growth in constant currencies was 11%, helped by 7% comparable sales, with all regions and product categories contributing. Sales trends in the second quarter were broadly in line with the first quarter and came on top of an unchallenging comparison base (comparable sales declines in the low single digits in 2017 and high single digits in 2016). Management kept its guidance for high-single-digit sales growth for the year (we expect 8.8% revenue growth with a 1.9% contribution from space and 6.9% comparable sales). Increased marketing activities, new collection acceptance, and a continued supportive demand backdrop should help fuel sales growth.

All product categories contributed to growth; jewelry collections were especially strong at 18%, with strong performance of the iconic lines and early success of the Paper Flowers collection. Engagement jewelry, a weaker performer for the company historically, also delivered high-single-digit growth on top of three years of declines.

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