After missing the Zacks Consensus Estimate in the final quarter
of fiscal 2013,
Tiffany & Company
) is back in the game as it kick-started fiscal 2014 with an
earnings beat. Shares of this designer, manufacturer and retailer
of fine jewelry have gained roughly 4.4% since May 21, when it came
out with its first-quarter results. It seems Tiffany is gradually
Estimates have been showing an uptrend since the earnings
announcement. The better-than-expected results triggered a
northward movement in the Zacks Consensus Estimate, as analysts
became more constructive on the stock's future performance that has
advanced 9.1% so far in the year.
This is evident from the movement witnessed in the Zacks
Consensus Estimate that increased 2.9% to $4.28 for fiscal 2014 in
the past 30 days. For fiscal 2015, the Zacks Consensus Estimate
jumped 2.3% to $4.86 in the same period.
We observe that both the top and bottom lines came ahead of the
Zacks Consensus Estimate. The quarterly earnings of 97 cents a
share beat the Zacks Consensus Estimate of 77 cents and the
prior-year quarter earnings of 70 cents. Results benefited from
higher sales and improved operating margin. Net sales of $1,012.1
million grew 13% from the prior-year quarter, and surpassed the
Zacks Consensus Estimate of $953 million.
We believe Tiffany is well positioned to support robust sales
and witness earnings growth in the long run by leveraging capital
investments made over the past several years in distribution,
manufacturing and diamond sourcing processes. Moreover, with nearly
half of the total sales generated internationally, we believe that
the company is well diversified from a regional perspective as
Management remains committed to attaining long-term objectives
of at least 15% earnings growth and a 10-12% sales increase
annually. Moreover, the company's long-term goal is to attain ROA
of at least 10% and ROE of at least 15%.
The company holds a significant position in the world jewelry
market, and its long-term growth prospects remain encouraging given
its new product launches and focus on enhancing its geographic
reach through the store expansion program.
Tiffany, which competes with
Signet Jewelers Limited
), carries Zacks Rank #2 (Buy).
Other Stocks to Consider
Other better ranked retail stocks that look promising include
Skechers USA Inc.
) sporting Zacks Rank #1 (Strong Buy) and
) holding a Zacks Rank #2 (Buy).
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SKECHERS USA-A (SKX): Free Stock Analysis
TIFFANY & CO (TIF): Free Stock Analysis
SIGNET JEWELERS (SIG): Free Stock Analysis
HANESBRANDS INC (HBI): Free Stock Analysis
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