Tiffany & Co. (TIF) Misses on Earnings, Revenue

Shares of Tiffany & Co. (TIF) were trading down -4.58 or -5.38 percent to $80.50 in Thursday's premarket after the company released its second quarter earnings early this morning which failed to meet analyst expectations for both earnings and revenue. Tiffany & Co. stock closed at $85.08, up +3.24 or +3.96 percent in Friday's regular trading session.

New York City based Tiffany & Co., founded in 1837 is a U.S. multinational jeweler and luxury retailer.
Through its stores and direct-mail marketing, the company sells jewelry, china, crystal, sterling silver, fragrances, stationary and personal accessories. The company is known for selling luxury goods and has a reputation for its diamond jewelry. Tiffany's flagship store is located at the corner of Fifth Avenue and 57th Street in Manhattan, New York City.

Tiffany & Co. reported it had earnings of $105 million or $0.81 per diluted share in the second quarter compared to $124 million or $0.96 per share in the same period one year ago, a decline of -16 percent. Net sales for the company came to $991 million versus $993 million last year. The analyst consensus was for the company to report earnings of $0.91 per share on $1 billion in revenue.

On a constant exchange rate basis, comparable store and total store sales in the Americas were flat in the second quarter compared to last year, with an increase of one percent in total sales for the first half. The company cited higher U.S. sales which were offset by lower foreign tourist spending due in large part to the strong U.S. Dollar. The $475 million reported for the region was two percent below the previous year with sales for the first half of $918 million equal to the previous year's first half.

For Europe, both total and comparable store sales increased +19 percent in the quarter with total sales increasing +20 percent and comparable store sales up +18 percent. Japanese total sales and comparable store sales increased +27 and +21 percent respectively, while the Asia Pacific region total sales and comparable store sales grew +9 and +6 percent respectively, all on a constant currency exchange rate basis.

Other sales declined -27 percent in the second quarter, in large part due to lower wholesale sales of diamonds, nevertheless, on a comparable store basis, sales increased +8 percent. In the year's first half, total sales were down -12 percent but comp store sales increased +4 percent. In U.S. Dollars, Other sales declined -33 percent to $23 million in the quarter, and -19 percent to $58 million in the first half.

In the company's press release, Frederic Cumenal, Chief Executive Officer, said, "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. While the adverse effects from the strong dollar have been even more significant than initially expected, we met our overall expectations in the first half of the year."

For the full year, Tiffany said adjusted earnings per share growth would be "two to five percent below" last year's total of $4.20 per diluted share. Analysts expected earnings per share of $4.26 for the full year. Tiffany stock is already down over five percent in this morning's premarket having traded as low as $79.40 earlier.

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Published on Aug 27, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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