Shares of Tiffany & Co (TIF) popped following a sales update from Richemont, another luxury jeweler, increasing optimism that the luxury goods industry is in the midst of a turnaround.

WHAT'S NEW: Geneva-based luxury-goods maker Richemont said this morning that sales for its third quarter increased by 5% at constant exchange rates and by 6% at actual rates versus the year-ago period. The increase in total sales was driven by an 8% increase jewelry unit sales, offsetting a 2% drop in specialty watch sales. Richemont, which owns Cartier jewelry and watchmakers IWC and Piaget, said total sales for the October-December quarter increased to EUR3.09B, up from EUR2.93B a year ago.

ANALYST COMMENTARY: Following Richemont's report, Bernstein analyst Mario Ortelli noted that "The cross-read of these results will probably benefit the other luxury names." In November, Nomura said Tiffany's third quarter showed the first growth in sales since the fourth quarter of 2014, in earnings since 4Q14 and in fashion jewelry since the second quarter of 2015. In December, Wells Fargo identified Tiffany as one of the retailers "best positioned" to benefit from upcoming federal policy changes.

RECENT EARNINGS: Tiffany's Q3 results exceeded analyst expectations, though the luxury jeweler said it needed to see more positive data before considering the quarter "an inflection point." At the time, CEO Frederic Cumenal said that while the company was "encouraged" by some early signs of improvement in overall sales trends, it is "premature" to say there has been a "meaningful" turn in the business.

PRICE ACTION: Tiffany & Co is up 2.5% to $79.69 in morning trading.

OTHERS TO WATCH: Richemont and Tiffany peers include Swatch (SWGAY), whose shares trading in New York up almost 6%, Signet Jewelers (SIG) and Blue Nile (NILE).