Zacks Investment Research downgraded
Tiffany & Company
) to a Zacks Rank #5 (Strong Sell) on Jan 9, 2013.
Why the Downgrade?
Tiffany has witnessed sharp downward estimate revisions after
reporting soft holiday sales numbers that prompted management to
take a conservative stance on its future earnings. Results were
at the lower end of management's expectations. It seems that the
company is at an unfavorable position as the challenging economy
is taking away some of the sheen from this jewelry retailer.
On a constant-currency basis, total worldwide net sales for
the two months period ended Dec 31, 2012, marked an increase of
4%, whereas comparable-store sales (comps) remained flat. We
observe that the rate of growth of net sales and comps
decelerated from 6% and 4%, respectively, registered during the
two months period ended Dec. 31, 2011.
When compared to its peer,
), Tiffany seems to be losing market share as Zale witnessed a
2.3% increase in its comps for the period under review.
Following soft holiday sales, Tiffany expects fiscal 2012
earnings to be at the lower end of the previously provided
guidance range of $3.20 to $3.40 per share, when the company
posted disappointing third-quarter fiscal 2012 results on Nov 29,
2012. The quarterly earnings of 49 cents a share missed the Zacks
Consensus Estimate of 63 cents, and dropped sharply from 70 cents
earned in the prior-year quarter.
The Zacks Consensus Estimate for the fourth quarter and fiscal
2012 dropped 3.5% and 1.5%, to $1.37 and $3.21 per share,
respectively, over the past 7 days. Moreover, for the first
quarter and fiscal 2013, the Zacks Consensus Estimate fell by
4.3% and 5.6% to 67 cents and $3.54 per share, respectively, over
the same time frame.
Other Stocks to Consider
Not all jewelry retailers are performing as poorly as Tiffany.
Signet Jewelers Limited
) is expected to continue with its positive earnings surprise
trend, andholds a Zacks Rank #2 (Buy). Other retail stocks that
look promising are
G-III Apparel Group, Ltd.
Gildan Activewear Inc.
), both of which hold a Zacks Rank #1 (Strong Buy).
G-III APPAREL (GIII): Free Stock Analysis
GILDAN ACTVWEAR (GIL): Free Stock Analysis
SIGNET GRP PLC (SIG): Free Stock Analysis
TIFFANY & CO (TIF): Free Stock Analysis
To read this article on Zacks.com click here.