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Tiffany & Co. (TIF), Signet Jewelers Ltd. (SIG), Blue Nile Inc (NILE): Wedding Season Looks Strong for These Jewelers

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The rebounding economy is helping couples looking to celebrate that joyous occasion of marriage. Consumer confidence is strong as rising home values and a strong stock market have given way to pricier engagement rings. That is boosting the profits at jewelers and lifting their outlook for the rest of the year.

The Great Gatsby of jewelers

Tiffany & Co. (NYSE:TIF)

Tiffany & Co. (NYSE:TIF) considers itself to be the world’s premier jeweler. Tiffany & Co. (NYSE:TIF) not only sells engagement rings and diamond jewelry, but also sterling silver, china, crystal, fragrances and other luxury items. The company operates approximately 275 stores globally.

In the first quarter of this year, the company posted net earnings of $83.6 million compared to the prior year’s $81.5 million. Revenues rose 9.3% to $895.5 million, beating expectations of $854.6 million. Earnings for the full year are forecast to be $3.43 to $3.53 per share compared to last year’s $3.25 per share. The drop in gold and silver prices is seen as increasing demand, particularly in China where jewelry sales rose 38% year-over-year in May.

For Tiffany & Co. (NYSE:TIF), the growth lies in emerging markets, particularly in Asia. This year Tiffany & Co. (NYSE:TIF) plans to open an additional 16 stores, including four in China. The Chinese have an appetite for name brands, and that’s benefiting Tiffany. The company’s tie-in with the movie The Great Gatsby also helps with marketing as Tiffany & Co. (NYSE:TIF) made all the jewelry pieces in the movie. After watching the movie, potential customers can go to the nearest Tiffany & Co. (NYSE:TIF) store and see the collection in person.

The jewelry store in every mall

Signet Jewelers Ltd. (NYSE:SIG) is in practically every mall with its stores Kay Jewelers and Jared The Galleria Of Jewelry in the U.S. and Ernest Jones in the United Kingdom. Even thou Signet Jewelers Ltd. (NYSE:SIG) doesn’t have the cache of Tiffany, it is the largest jewelry retailer in the world. The focus for Signet is on the middle market.

In the first quarter of this year, same-store sales rose 8.1% compared with only a 1.2% increase in the same period last year. Earnings per share rose 18% to $1.13, which was $0.02 better than expectations. Revenues rose 10.4% to $993.6 million.

Looking forward, shareholders are being rewarded with a $350 million share repurchase program. The company also pays a $0.15 per share quarterly dividend for a yield of 0.90%. To fund these operations, the company has $263.70 million in cash on the balance sheet and only $5.70 million in debt. Operating cash flow last year was $323.80 million. With a dividend payout ratio of only 8%, shareholders in Signet Jewelers Ltd. (NYSE:SIG) can look forward to more share buybacks and dividend increases. Management is doing an excellent job managing the company’s finances.

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