What You Should Know Ahead Of Tiffany’s (TIF) Q4 Earnings

Tiffany & Co. (TIF – Free Report) , which designs, manufactures and retails jewelry and other items globally, is slated to report fourth-quarter fiscal 2016 results on Mar 17. Barring the first quarter, the company has outpaced the Zacks Consensus Estimate in the second and third quarters by 18.3% and 13.4%, respectively. In the first quarter, the company posted negative earnings surprise of 5.9%. Let’s see how things are shaping up for this announcement.

What to Expect?

The question lingering in investors’ minds now is, whether Tiffany will be able to post positive earnings surprise in the quarter to be reported. In the trailing four quarters, Tiffany outperformed the Zacks Consensus Estimate by an average of 7.5%. The current Zacks Consensus Estimate for the quarter under review is $1.37, reflecting a year-over-year decline of over 6%. We noted that the Zacks Consensus Estimate has declined by 2 cents in the past 30 days. Analysts polled by Zacks expect revenues of $1,224 million, down about 0.8% from the year-ago quarter.

Factors at Play

We believe Tiffany’s omni-channel platform, store expansion programs, tapping of new markets and venturing into new revenue generating avenues may help improve performance, as evident from back-to-back positive earnings surprises in the second and third quarters. These facilitated the stock to outpace the industry in the past six months. In the said time frame, the stock has surged 23%, while the Zacks categorized Retail-Jewelry Stores industry has advanced 7.5%.

However, the lackluster performance this holiday season raises concern. Management stated that soft consumer spending and lowered sales at Fifth Avenue Flagship Store on account of its proximity to the Trump Tower hurt sales. Further, the company pointed that though macroeconomic headwinds will prevail in 2017, it will counter the same through strategic initiatives and cost containment efforts. Management anticipates earnings per share for fiscal 2016 to decline by “no more than a mid-single-digit percentage” and reaffirmed that worldwide net sales is expected to decline by a low-single-digit percentage.