Will Tiffany's (TIF) Q2 Earnings Lose Sheen on Soft Demand? - Analyst Blog


Tiffany & Company ( TIF ), the designer, manufacturer and retailer of fine jewelry, is slated to report second-quarter fiscal 2014 results on Aug 27. In the last quarter, it posted a positive surprise of 26%. Let's see how things are shaping up for this announcement.

Factors Influencing This Quarter

Tiffany holds a significant position in the world jewelry market, and its long-term growth prospects remain encouraging given its product launches and focus on enhancing its geographic reach through store expansion. However, soft demand continues to haunt as economic recovery remains sluggish. While this could be reflected in the results of the quarter to be reported, an expected increase in marketing expenses may also weigh upon the bottom line.

Earnings Whispers

Our proven model does not conclusively show that Tiffany is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below.

Zacks ESP: Tiffany has an Earnings ESP of -1.16%. This is because the Most Accurate estimate stands at 85 cents, while the Zacks Consensus Estimate is pegged higher at 86 cents.

Zacks Rank: Tiffany has a Zacks Rank #2 (Buy) but we need to have a positive ESP to be confident about an earnings surprise. We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks that Warrant a Look

Here are some companies you may want to consider as our model shows that these have the right combination of elements:

Abercrombie & Fitch Co. ( ANF ) has an earnings ESP of +10.00% and a Zacks Rank #2.

Costco Wholesale Corporation ( COST ) has an Earnings ESP of +1.33% and a Zacks Rank #3 (Hold).

Ross Stores Inc. ( ROST ) has an earnings ESP of +1.16% and a Zacks Rank #3.

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ABERCROMBIE (ANF): Free Stock Analysis Report

COSTCO WHOLE CP (COST): Free Stock Analysis Report

ROSS STORES (ROST): Free Stock Analysis Report

TIFFANY & CO (TIF): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: ANF , COST , ROST , TIF



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