Coach, Inc. (COH), Michael Kors Holdings Ltd (KORS), Tiffany & Co. (TIF) – The Height of Luxury: Which Luxury Brands Are on the Rise?

These unexpected results have been attributed to a combination of promotional tactics surrounding Tiffany & Co. (NYSE:TIF)’s 175^th anniversary and The Great Gatsby film. In spite of this positive news, though, Tiffany is still coming off two disappointing holiday seasons and is not overly optimistic. Tiffany did not change its profit outlook for the year. According to Tiffany & Co. (NYSE:TIF)’s head of investor relations, Mark Aaron, “[Tiffany] cautions you not to draw overly optimistic conclusions from the first quarter.”

I would take Aaron’s advice. With a current stock price of almost $80, a PEG ratio of 1.92, and quarterly earnings growth of only 0.7%, Tiffany currently appears to be overvalued. If Tiffany & Co. (NYSE:TIF) can continue to capitalize on The Great Gatsby and have positive growth during the second quarter, it could turn into a buy. With its history and customer loyalty, Tiffany & Co. (NYSE:TIF) is a strong brand that still has growth potential overseas. But for now, I’d leave Tiffany alone until its stock price comes down.

Conclusion

When it comes to luxury items, Coach, Inc. (NYSE:COH), Michael Kors Holdings Ltd (NYSE:KORS), and Tiffany & Co. (NYSE:TIF) are all recognizable brands that people will pay a premium to own.  This is because these items aren’t just bags or jewelry, they’re status symbols.  People want to be associated with these brands, and that gives these companies tremendous power.  Opportunity lies in international expansion. The luxury item market has seen growth in sales over the past few months and it will be interesting to see if second quarter earnings reports are as favorable as the first quarter’s. So invest and you can find yourself living in luxury thanks to luxury.

The article The Height of Luxury: Which Luxury Brands Are on the Rise? originally appeared on Fool.com and is written by Ben Popkin.

Ben Popkin has no position in any stocks mentioned. The Motley Fool recommends Coach. The Motley Fool owns shares of Coach. Ben is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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