Tiffany & Co. (NYSE: TIF)
Before the market opened today Tiffany & Co. announced second quarter results of 86 cents per share on $991 million in sales. This was below the analysts estimates surveyed by Thomson Reuters, which had a forecast of 91 cents per share on $1.01 billion in sales, and sent the shares tumbling premarket. TIF said the decline in revenue was mainly due to the stronger dollar causing less tourist spending in the US resulting in softer demand than expected.
“We entered this year expecting translation and tourism-related pressures on sales and earnings from the exceptionally strong U.S. dollar, as well as challenging economic conditions in certain markets,” Tiffany CEO Frederic Cumenal said in a statement. TheStreet
TIF also lowered full year guidance and is expecting a decline of 2-5% in EPS from the $4.20 reported a year ago. This is some concerning news if you are an investor and leaves me to believe that the bounce today was mostly shorts covering their position. However, analysts are still bullish with an average price target at $102.14 based on 28 different ratings. I wouldn’t be surprised if any downgrades come out in the near future based on the weak outlook and for the time being that’s keeping me on the sidelines.
2015 has not been kind to TIF’s stock price and after their earnings release Thursday morning they hit the lows again at $81.50 before getting a nice bounce up. TIF experienced a Death Cross early in the year and has since spent most of the time trading under the 200d moving average. Major consolidation has taken place between the $91 and $85 price range with another consolidation range between $96 and $91. As of the end of day today, share prices are down over 20% for the year and all major moving averages are starting to point south.
In premarket trading after they announced earnings, share prices dropped all the way down to $78 before rebounding to an opening price of $81.64, a 4% decrease from yesterday’s close, and reaching an intraday high of $85.24. The $82 price level has been a significant level in the past and looks like it’s still holding true to today. I would like to see it hold above this price but if it doesn’t then the argument for further downside pressure is much greater.
About Tiffany & Co.
Tiffany & Co. is a holding company, which through its subsidiaries engages in jewelry merchandise. The company also sells timepieces, leather goods, sterling silverware, china, crystal, stationery, fragrances and accessories. It operates through five business segments: Americas, Asia-pacific, Japan, Europe and Other segment. The Americas segment includes sale of products in certain markets in the U.S. through business-to-business, Internet, catalog and wholesale operations. The Asia-Pacific segment includes sale of products in China, Korea, Hong Kong, Taiwan, Australia, Singapore, Macau and Malaysia through Internet and wholesale operations. The Japan segment includes sale of products in Japan through business-to-business, Internet and wholesale operations. The Europe segment includes sale of products in the United Kingdom, Germany, Italy, France, Spain, Switzerland, Austria, Belgium, the Czech Republic, Ireland, and the Netherlands through Internet and wholesale operations. The Other segment consists primarily of wholesale sales of Tiffany’s merchandise to independent distributors for re-sale in certain emerging markets. The company’s business roots back to 1837, when its subsidiary, Tiffany & Company, NY was founded. Tiffany & Co. was founded in 1984 and is headquartered in New York, NY.