Factors Likely to Decide Tiffany's (TIF) Fate in Q3 Earnings

Tiffany & Co. TIF, which recently accepted the buyout offer of LVMH Moet Hennessy Louis Vuitton SE, is scheduled to release third-quarter fiscal 2019 results on Dec 5. In the preceding four quarters, this jewelry retailer’s bottom line has outperformed the Zacks Consensus Estimate by 2.5%, on average. In the last reported quarter, the company delivered a positive earnings surprise of 6.7%.

The Zacks Consensus Estimate for earnings in the third quarter has remained unchanged in the past 30 days at 85 cents. This suggests an increase of 10.4% from 77 cents reported in the year-ago quarter. The consensus mark for revenues is pegged at $1,036 million, indicating an improvement of 2.4% from the year-ago quarter’s reported figure.

Factors to Note

Tiffany’s focus on evolving its brand, enhancing omni-channel experience, elevating in-store experience and replenishing product portfolio has been aiding its performance. Notably, the company has been strengthening its network of stores through openings as well as upgrading flagship stores in three important areas, Beijing, Shanghai, and Hong Kong.

However, sluggish demand from foreign tourists, adverse currency fluctuations and disruptions in Hong Kong remain concerns. The impact of escalating trade tensions between the United States and China cannot be ruled out.

Additionally, any increase in marketing spending or higher expenditure in technology, visual merchandising, digital and store presentations might have kept margins under pressure in the quarter under review. Tiffany deferred its marketing spending into the second half of fiscal 2019 due to new product launches.

Tiffany & Co. Price, Consensus and EPS Surprise

 

Tiffany & Co. price-consensus-eps-surprise-chart | Tiffany & Co. Quote

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Tiffany this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Tiffany carries a Zacks Rank #3 and an Earnings ESP of -6.23%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combination

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

Costco COST has an Earnings ESP of +1.01% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar General DG has an Earnings ESP of +1.23% and a Zacks Rank #2.

Big Lots BIG has an Earnings ESP of +3.85% and a Zacks Rank #3.

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

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