What happened

Luxury jewelry retailer Tiffany (NYSE:TIF) gained 21% through the first half of the year, according to data provided by S&P Global Market Intelligence.

TIF Chart

TIF data by YCharts

The rally continued a positive trend for shareholders, who have seen their investment spike from a low of $60 per share in mid-2016.

So what

Optimism began building early in the year on hopes that a new CEO and fresh leadership on the board of directors might start pushing the business in a positive direction following two years of declining sales. Tiffany's subsequent fourth-quarter report, issued in March, revealed continued demand weakness, but also showed encouraging profit trends. Specifically, revenue slipped by 1% over the holiday season period, while gross profit margin improved to 64% of sales from 63%.

A diamond ring.

Image source: Getty Images.

Tiffany added to the positive momentum in May when it announced that revenue had ticked 1% higher in the fiscal first quarter, beating management's expectations. Healthy growth in the Asia-Pacific region more than made up for softness in Europe, Japan, and the U.S.

Now what

Interim CEO Michael Kowalski and his executive team are predicting that this fiscal year will mark the retailer's first annual sales growth since fiscal 2014. At the same time, cost cuts and rising prices should push profitability higher.

That improving financial picture gave management the confidence to boost Tiffany's dividend payout by 11%, compared to a 5% increase last year . It also contributed to growing optimism on the part of investors who are beginning to see a path back to sustainable growth for one of the world's most recognizable jewelry brands.

Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.