Tiffany & Co. Shows Strong Earnings with Colored Diamond Sales

The luxurious jewelry company beat analyst expectations on all counts.
5:19 | 08/27/14

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Transcript for Tiffany & Co. Shows Strong Earnings with Colored Diamond Sales
I'm Michelle Franzen in New York is the financial markets close on Wall Street for this Wednesday -- -- story stuck. And hidden inside the Tiffany blue box today some shiny earnings bringing tears of joy for its investors today. The luxury jeweler. Beating analysts' expectation. On all counts so for more on the success of this iconic jeweler want to bring in Jeff -- from Yahoo! finance. Jeff good to see you again what's making Tiffany's diamond sparkle extra bright. This court. It's up boxes Michelle that's a trick questions it. They get the highest margins and corrugated cardboard boxing at any industry it's incredible -- they -- -- and I guess they print gold for Tiffany. This company -- -- the 59%. Competitors. Are roughly half that in terms on gross basis you walk into a -- and it's just. Be dazzling you can practically see Audrey Hepburn having a -- on why you're there the company kicked butt on analysts' estimates its shares -- 25% over the last 52 weeks. It's kind of shaken off a lot of had once people thought Japan I was gonna bring it down we keep thinking that. -- consumers market be that strong but you know what no one pays full retail price for diamonds when they're worried about the economy. And based on what -- been able to new quarter after quarter for last couple years things are looking okay. And that's it Jeff tipping stock was down earlier this year but clearly making a rebound breakdown that our force. Well you see -- that's -- we're talking about when we've got some troubles in Japan earlier and end. Back earlier in the year there's there's a trade chart it. We saw some troubles that -- that we really -- -- economics was going to be more I had went for them and sure enough same store sales were down 13% in Japan. But overall same store sales were very strong bid for Tiffany that's important because Japan has a critical market for -- both on tourism basis. When when those customers come all of mom over here and -- in Japan itself and -- being able to shake that -- by investing in their store base. It really brought some glitter back to the brand in this been a comeback stories that they missed they've used to be just a perennial disappointment. And they got an activist involved in their back in 20112012. The company managed to ship itself -- and and get all glistening again and it's been out up ever -- all right so let's. Yeah marketing as the company's -- frantic color diamonds they users they told me that you don't want colored diamonds back then the stone age when I bought -- myself. -- now apparently nick Allard -- -- -- a new hot thing its activities they relate to. Market that the united which brings up -- whole concept of diamonds -- general but hey. If they're able to sell at that works for the company and that's fantastic and so Tiffany bought a lot of these diamonds and the prices were lower in the markets were worse. Now they're able to raise prices into a stronger economy. On -- on diamonds have been paid last four and man that is a nice combination of you can pay last year commodity goods and -- -- the store level. It's it's like magic you'd be amazed when the profits -- you know you mentioned Japan but a big reason also for this year's success or sales in China. Seems like folks there are also adopting the diamond ring culture as a -- about that. I'm -- apply about the diamonds and and you just show Breakfast at Tiffany's there's something about the entire experience working it's just intoxicating. There shouldn't be anything about it say it's a -- a carbon. Michelle -- there's there's nothing intrinsically that. Valuable about a diamond there's a lot of diamonds out there it's it's false scarce commodity you know why you. He had -- special -- -- I can't convince you otherwise I don't know man have been trying for years to convince women that this is just not something that anyone needs but you know what China's stopping. And that's -- for Tiffany that works -- that makes pretty much the entire world that's adopted the diamond lifestyle. Tiffany margins are showing that there's an expensive stock it's been running like crazy. It might be a little Dicey here -- history has not been trying to luxury brands that have gone -- like this. But managed just do not get against the you know you just do you -- -- want to watch from the sidelines. -- of these brand name also you know very good but how happy the customer base how is that changed obviously. Always a fluids are they having different types of customers also commendable. In -- There are there have been able to raise the prices across the spectrum goods and sort of bringing and -- lower and customers without diminishing the brand that has a very very careful balance of the very delicate thing to do for any type of top and brand. To lower prices and bring in more customers. And again the consumers spend their friend here a lot of mixed reviews about what the consumers doing and how people are feeling -- and -- -- polls and different retailers say different things. But there is no discretionary -- on -- quite as discretionary as a lump of carbon that's been marketed to be a symbol of love and that is the diamond and I tell you what. Tiffany when they're able to -- -- that's a sign a robust consumer it spread worldwide and so they've done two things they've been able to get this idea this concept. Out into the rest of the world that's been nice -- form and they've also gone to the lower and -- able to maintain those margins all of this. Is really high level operating it's kind of neat stuff to see for -- -- to reach a walk like me it's fun to see a company like this that that was given for data few years ago -- -- -- strong. Jeff MacKey from Yahoo! finance thanks as always for joining us. And even watching stories stocks stay with For your latest headlines I'm Michelle Franzen and New York.

This transcript has been automatically generated and may not be 100% accurate.

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