Tiffany & Co. | $TIF Stock | A Diamond in the Rough?


Tiffany & Company (NYSE: TIF)


Tiffany & Co is set to report its 2016 first quarter financial results on Wednesday, May 25 2016 before the market open. Analysts are expecting earnings of $.68 a share on $914.94M in revenues.


TIF Analyst Expectations

Robert Drbul, an analyst at Nomura, noted,

While we are optimistic about TIF’s efforts to improve its positioning with the domestic consumer, we think that materialization will take some time and that pressure from reduced tourism will continue.” He also added, “While top-line challenges persist, we are encouraged by the GM opportunity and forecast 40bps of expansion in 1Q16, driven by favorable product input cost (partic. metal), price increases, and manufacturing initiative. – Benzinga


Just Another Retailer?

The recent slew of weak guidance from the retailers has brought a bloodbath to their stock prices raising concerns for economic growth as consumer spending has tightened at the mainstream big box stores.  TIF, being positioned in the luxury retail segment, is sure to feel even more pressure as their high end jewelry is far outside the budget of most.

Another very important factor to take note of when TIF does report is the recent strength of the dollar. As mentioned in their last report, their international clientele are not spending as much due to the  current state of the dollar. This will be very interesting to see if the same trend has continued into Q1 and the company’s comments on expectations going forward in regards to the dollar and how they expect it to affect future business.  

Chief executive officer, Frederic Cumenal, noted,

“We faced various challenges during the year that negatively affected our financial results, especially related to the strong U.S. dollar. However, our management team continued to pursue initiatives to strengthen Tiffany’s abilities to serve our clientele effectively and deliver extraordinary products and experiences. This included introducing a range of enticing new products spanning diamonds to silver jewelry, and enhancing our global store base. Worldwide sales growth of only 2% on a constant-exchange-rate basis, or down 3% as reported, along with the lack of earnings growth, did not meet the forecasts we had communicated at the start of the year; however, we were pleased with an increase in gross margin, strong free cash flow, and our ability to return cash to shareholders through another dividend increase and share repurchases.”

About Tiffany & Co.

Tiffany & Co., incorporated on August 16, 1984, is a holding company that operates through its subsidiary companies. The Company’s principal subsidiary, Tiffany and Company (Tiffany), is a jeweler and specialty retailer. Through its subsidiaries, the Company designs and manufactures products and operates TIFFANY & CO. retail stores around the world, and also sells its products through Internet, catalog, business-to-business and wholesale operations. The Company’s segments include Americas, Asia-Pacific, Japan, Europe and Other. The Company’s principal merchandise offering is jewelry; it also sells timepieces, leather goods, sterling silverware, china, crystal, stationery, fragrances and accessories. – Reuters