Tiffany & Co. (TIF), Michael Kors Holdings Ltd (KORS): Should You Indulge in These Luxury Stocks

Tiffany & Co. (NYSE:TIF) has a classic, historic brand that has maintained its luxury appeal.  The company continues to expand and plans to open 14 new stores during the current fiscal years. Six of the new stores will be in the United States, three in Europe, and seven in Asia-Pacific while closing two stores in the region. The company also plans to refurbish many of its global locations. Tiffany & Co. (NYSE:TIF) reaffirmed its 2013 outlook with sales growing in the mid-single digits and operating income growing in line with sales growth.  The company’s P/E ratio is pricing in a good amount of growth, but the stock remains a buy due to the strength of its brand and international sales. The company also stands to grow sales through continued global expansion and increased brand recognition.

Michael Kors Holdings Ltd (NYSE:KORS) is the most attractive investment, given its robust growth and strong future prospects. The company opened 67 stores in the prior fiscal year, and the expansion is clearly reflected in sales. The company has also been successful at driving sales across all channels. Retail net sales increased 69.5%, comparable store sales increased 40.1%, wholesale net sales increased 69.2%, and licensing revenue increased 33.5%. The company credits increased brand awareness and the appeal of its product offerings for the increase in revenues. The company expects sales to grow by 15%-20% in the next fiscal year. The stock is pricing in a fair amount of growth, but the company still has plenty of room to expand as its brand awareness continues to grow. Michael Kors Holdings Ltd (NYSE:KORS) may also begin to pay a dividend in the near future, given its large cash balance and history of strong operating cash flows.

John Timmes has no position in any stocks mentioned. The Motley Fool recommends Coach. The Motley Fool owns shares of Coach.

The article Should You Indulge in These Luxury Stocks originally appeared on Fool.com.

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