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Tiffany's (TIF) Prospects Bleak: Buy These Retail Stocks Instead
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Tiffany & Co. remains deeply entrenched in the bearish territory as the stock has lost its value by nearly 18% in the past six months. Investors need to exercise extreme caution when it comes to the stock as it is unlikely to show any major improvement in the near future. Let’s delve deeper and try to find out what is taking this Zacks Rank #4 (Sell) company down.
Tiffany's dwindling top-line and bottom-line performances remain the primary concern for investors. A look at the company's fiscal 2015 results unveils that earnings per share fell 7.9% and 3% year over year in the third and the fourth quarter, respectively. Net sales also declined 2.2% and 6%, respectively, over the same period.
Fiscal 2016 also witnessed a rough start with a year-over-year decline of 21% in earnings per share and 7% in net sales in the first quarter. A mature domestic market, foreign currency headwinds and cautious consumer spending continue to pose concerns.
Following the dismal performance, management provided a muted outlook for fiscal 2016. Management anticipates earnings per share for fiscal 2016 to decrease by a mid-single-digit percentage from the prior year. The company had earlier forecast earnings per share for fiscal 2016 to be flat to down in mid-single digits. Tiffany now projects fiscal second-quarter earnings to decline at the same rate as the fiscal first quarter. The company estimates fiscal 2016 worldwide net sales to decrease by a low-single-digit percentage.
Tiffany’s earnings estimate revisions provide a clear picture of analysts’ opinion about the stock. In the past 30 days, the Zacks Consensus Estimate for fiscal 2017 has declined by 3.5% to $3.61 per share. Also, over the same time frame, the estimates for fiscal second quarter have moved down to 72 cent from 80 cents.
With Tiffany’s share price tumbling and estimates witnessing downward revisions, it would not be prudent to keep the stock in your portfolio, at least for the time being. But for now, how about being a wise investor? Let’s look for some retail stocks that could prove to be great additions.
3 Prominent Picks
We suggest investing in Delta Apparel Inc. (DLA - Free Report) , which flaunts a Zacks Rank #1 (Strong Buy). The Greenville, SC-based company delivered an average positive earnings surprise of 28.5% over the trailing four quarters. This designer, manufacturer and marketer of portfolio of lifestyle basics and branded active wear apparel and headwear products is expected to witness earnings growth of more than four times in fiscal 2016 and 25% in fiscal 2017.
Burlington Stores, Inc. (BURL - Free Report) with a Zacks Rank #2 (Buy) and long-term earnings growth rate of 17.7% is a solid bet. This Burlington, NJ-based retailer of branded apparel products delivered an average positive earnings surprise of 23.2% over the trailing four quarters. It is expected to witness earnings growth of 20.7% in fiscal 2016 and 16.7% in fiscal 2017.
The last but certainly not the least stock that you may add to your portfolio is BJ's Restaurants, Inc. (BJRI - Free Report) . This operator of casual dining restaurants carries a Zacks Rank #2 and has a long-term earnings growth rate of 17.9%. This Huntington Beach, CA-based company delivered an average positive earnings surprise of 18.5% over the trailing four quarters. The company is expected to witness earnings growth of 22.1% in 2016 and 13.6% in 2017.
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Tiffany's (TIF) Prospects Bleak: Buy These Retail Stocks Instead
Tiffany & Co. remains deeply entrenched in the bearish territory as the stock has lost its value by nearly 18% in the past six months. Investors need to exercise extreme caution when it comes to the stock as it is unlikely to show any major improvement in the near future. Let’s delve deeper and try to find out what is taking this Zacks Rank #4 (Sell) company down.
Tiffany's dwindling top-line and bottom-line performances remain the primary concern for investors. A look at the company's fiscal 2015 results unveils that earnings per share fell 7.9% and 3% year over year in the third and the fourth quarter, respectively. Net sales also declined 2.2% and 6%, respectively, over the same period.
Fiscal 2016 also witnessed a rough start with a year-over-year decline of 21% in earnings per share and 7% in net sales in the first quarter. A mature domestic market, foreign currency headwinds and cautious consumer spending continue to pose concerns.
Following the dismal performance, management provided a muted outlook for fiscal 2016. Management anticipates earnings per share for fiscal 2016 to decrease by a mid-single-digit percentage from the prior year. The company had earlier forecast earnings per share for fiscal 2016 to be flat to down in mid-single digits. Tiffany now projects fiscal second-quarter earnings to decline at the same rate as the fiscal first quarter. The company estimates fiscal 2016 worldwide net sales to decrease by a low-single-digit percentage.
Tiffany’s earnings estimate revisions provide a clear picture of analysts’ opinion about the stock. In the past 30 days, the Zacks Consensus Estimate for fiscal 2017 has declined by 3.5% to $3.61 per share. Also, over the same time frame, the estimates for fiscal second quarter have moved down to 72 cent from 80 cents.
With Tiffany’s share price tumbling and estimates witnessing downward revisions, it would not be prudent to keep the stock in your portfolio, at least for the time being. But for now, how about being a wise investor? Let’s look for some retail stocks that could prove to be great additions.
3 Prominent Picks
We suggest investing in Delta Apparel Inc. (DLA - Free Report) , which flaunts a Zacks Rank #1 (Strong Buy). The Greenville, SC-based company delivered an average positive earnings surprise of 28.5% over the trailing four quarters. This designer, manufacturer and marketer of portfolio of lifestyle basics and branded active wear apparel and headwear products is expected to witness earnings growth of more than four times in fiscal 2016 and 25% in fiscal 2017.
Burlington Stores, Inc. (BURL - Free Report) with a Zacks Rank #2 (Buy) and long-term earnings growth rate of 17.7% is a solid bet. This Burlington, NJ-based retailer of branded apparel products delivered an average positive earnings surprise of 23.2% over the trailing four quarters. It is expected to witness earnings growth of 20.7% in fiscal 2016 and 16.7% in fiscal 2017.
The last but certainly not the least stock that you may add to your portfolio is BJ's Restaurants, Inc. (BJRI - Free Report) . This operator of casual dining restaurants carries a Zacks Rank #2 and has a long-term earnings growth rate of 17.9%. This Huntington Beach, CA-based company delivered an average positive earnings surprise of 18.5% over the trailing four quarters. The company is expected to witness earnings growth of 22.1% in 2016 and 13.6% in 2017.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>