Tiffany & Company
), a high-end jewelry designer, manufacturer and retailerand an
S&P 500 company, is slated to report its first-quarter 2012
financial results on Thursday, May 24.
The current Zacks Consensus Estimate for the quarter is 69 cents
a share that reflects a growth of 3% from the prior-year quarter's
earnings. The estimates in the current Zacks Consensus range
between a low of 60 cents and a high of 76 cents a share. The Zacks
Consensus revenue estimate is pegged at $818 million for the
quarter under discussion.
Recap of Fourth-Quarter 2012
Tiffany posted lower-than-expected fourth-quarter 2011 results.
The quarterly earnings of $1.39 per share missed the Zacks
Consensus Estimate of $1.41, and deteriorated from $1.44 earned in
the prior-year quarter.
Tiffany, which faces stiff competition from
Signet Jewelers Limited
), posted net sales of $1,187.4 million during the quarter, up 8%
from the prior-year quarter, on the heels of healthy performance by
stores in the Americas, Asia-Pacific, Japan and European regions,
comparable-store sales growth and new collection launches.
Total revenue also came ahead of the Zacks Consensus Estimate of
$1,185 million. Comparable-store sales climbed 6% in the quarter
under review. In constant currencies, net sales jumped 7% and comps
Zacks Agreement & Magnitude
The revisions in the estimates made by analysts in the last 30
days led to a penny's decrease in the Zacks Consensus Estimate for
the first quarter. In the last 30 days, only 1 out of 18 analysts
covering the stock moved up the estimate and another trimmed the
same. In the last 7 days, the Zacks Consensus Estimate has remained
constant as none of the analysts revisited their estimates.
Mixed Earnings Surprise History
With respect to earnings surprises, Tiffany has missed as well
as topped the Zacks Consensus Estimates over the last four quarters
in the range of negative 2.1% to positive 22.9%. The average
remained at positive 13.7%. This suggests that Tiffany has
outperformed the Zacks Consensus Estimate by an average of 13.7% in
the previous four quarters.
In the fourth quarter of fiscal 2011, the earnings missed the
Zacks Consensus Estimate by 2.1%, whereas in the third, second and
first quarters it beat the Estimate by 16.7%, 22.9% and 17.5%,
No matter how short lived; the sparkles of Tiffany did come
under the shadow, when the company posted lower-than-expected
fourth-quarter 2011 results. However, that did not deter the
company from providing a healthy outlook for fiscal 2012,
highlighting the improving economic environment, despite nagging
fears from the Euro zone.
Tiffany forecasts fiscal 2012 earnings in the range of $3.95 to
$4.05, reflecting a growth of 10% to 13%. While gross margin is
expected to remain under pressure for the next few quarters,
management projects maximum earnings growth to take place in the
concluding part of fiscal 2012.
If we closely scrutinize the earnings growth forecast, we
observe that it has some proximity to the company's long-term
objective of at least a 15% growth but reflects a lower growth rate
when compared with an increase of 23%, registered in fiscal
On the other hand, Tiffany now anticipates 10% growth in total
net sales for fiscal 2012, aided by an increase in sales across the
Americas and Asia-Pacific, compared with an increase of 18%
registered in fiscal 2011. However, the sales guidance meets the
lower end of the company's long-term objective of a 10% to 12%
Currently, we maintain our long-term "Neutral" recommendation on
the stock. Moreover, Tiffany holds Zacks #3 Rank that translates
into a short-term "Hold" rating.
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