As the U.S. continues to show signs of recovery, the upper percentile of the population is reaping most of the gains. This trend is occurring around the globe, with the richest 62 individuals now as wealthy as half the world's population.

Simply put, the rich keep getting richer. Income inequality infuriates liberals such as U.S. Senator Bernie Sanders (D-VT), but it's superb news for consumer discretionary companies, especially purveyors of "luxury goods."

Tiffany & Co. (TIF - Get Report) exemplifies the luxury goods sector and serves as a bellwether for overall discretionary consumer strength. Tiffany is scheduled to report earnings for the fourth quarter of fiscal 2015 ending January 2016, before the market's opening bell on March 18. Earnings-per-share (EPS) are expected to come in at $1.41, compared to $1.51 in the same quarter a year ago. 

Considering the company's challenges with the strong U.S. dollar, those EPS expectations are to be applauded. This year, Tiffany will enjoy growth momentum from the global rise in wealthy and upper-middle class spending. The company is poised for strong double-digit gains this year.

Consumer spending represents about 70% of the American economy and drives the country's gross domestic product (GDP) growth. Investors will be closely watching Tiffany's latest operating results in seeking clues to the health of retailing and consumer spending. Despite rising consumer sentiment, the global luxury goods company faces tailwinds from a robust greenback. In the third quarter, the company reported a 4% year-over-year (YoY) gain in sales in local currencies, but -2% as reported.

Tiffany designs, manufactures, and retails jewelry and other luxury goods around the world. In addition to its retail stores worldwide, Tiffany also conducts direct selling through the Internet and catalogues, as well as business gift programs.

The very name "Tiffany" evokes luxury -- and luxury spending is on the rise, but at a slower pace lately. In a recent report, consultancy Bain & Co. found that the global luxury market surpassed €1 trillion in retail sales value in 2015. Sales of personal luxury goods (jewelry, watches, clothes, shoes, leather goods, etc.) accounted for 80% of the total market and are expected to grow only 1% year-over-year in 2016 to €253 billion, as demand from luxury goods slackens a bit from once reliable sources such as China.

Personal luxury goods are Tiffany's bread-and-butter. As with many exporters, Manhattan-based Tiffany is getting hurt by an ascending dollar, which makes its goods more costly overseas. The high value of the dollar since the late 1990s has served as a huge tax on U.S. exports and a subsidy to U.S. imports.

But there's plenty of reason to remain bullish on Tiffany stock. The company still plans to open new stores around the world, an expansion plan that it can finance with robust free cash flow of $384 million. These new openings are scattered throughout the Americas, Asia-Pacific, Japan, Europe, and Russia.

The company already has made substantial investments in future growth, which will hold it in good stead when the dollar eventually stabilizes to a more realistic level. Indeed, some analysts are now predicting that the dollar will drop in 2016, due to the Federal Reserve's hesitancy in the face of uneven growth to significantly boost interest rates.

Despite flagging growth in China overall, wealthy consumers on the Chinese mainland continue to demonstrate an appetite for luxury brands. According to the Bain report, Chinese consumers represent the largest and fastest-growing nationality for luxury. Defying the vagaries of the country's GDP growth, China's penchant for excess won't dissipate anytime soon, putting TIF stock in the lap of luxury in the world's second largest economy. China's persistent infatuation with Western luxury is the sort of long-term growth trend that presents the best moneymaking opportunities.

The stock's trailing 12-month price-to-earnings (P/E) ratio is 18.39, a good value compared to 21.47 for its industry. Publicly traded consumer goods companies that come close to being Tiffany's peers, such as Nordstrom and Coach, sport trailing P/Es of 17.98 and 29.68, respectively.

With Tiffany stock trading at $70 a share recently, the mean analyst one-year price target is $82, for a gain of 17%. On the high end, the projected one-year price is $115, for a gain of 64%.

Rising spending on luxury goods, even in otherwise troubled emerging markets such as China, combined with recovery in North America, should put a sparkle on the famous Tiffany brand in the fourth quarter and throughout 2016. Tiffany is poised for strong double-digit gains this year.

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John Persinos is editorial manager and investment analyst at Investing Daily. At the time of publication, the author held no positions in the stocks mentioned.