Tiffany's Q2 Margin Expansion 'Remarkable' Analysts Say

Tiffany's TIF beat second-quarter Street profit views Wednesday and a couple of analysts said results prove that earlier price hikes and lower costs can continue to expand its gross margin.

The jewelry retailer's $0.96 per share in earnings beat Wall Street's forecast by a dime on seven percent revenue growth. Same-store sales gained three percent, in line with estimates. North American comps gained eight percent.

Bank of America's Lorraine Hutchinson attributed North American performance to improved displays and sales tactics, as well as to price increases earlier this year.

European same-store sales fell seven percent, but grew 10 percent in Asia, easing some earlier concerns about a slow down in Macau and Hong Kong.

Gross margin grew 240 basis points to 59.9 percent on higher prices and lower commodity costs, despite a slow-down in Japan where a new luxury tax was recently instituted.

Hutchinson maintained a Buy rating and $115 target saying an accelerating sales trend in North America plus a presence in undeveloped international markets justify a higher premium on the stock relative to its peers.

Deutsche Bank's Francesca Di Pasquantonio maintained a Hold rating and $100 target, but called the company's recent margin expansion and North American sales comps "remarkable."

Tiffany traded recently at $101.97, up 1.16 percent.