A month has gone by since the last earnings report for Tiffany & Co. . Shares have added about 6.5% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Tiffany Beats on Q1 Earnings, Sales Miss, View Intact
Tiffany & Co. posted fourth straight quarter of positive earnings surprise, when it reported first-quarter fiscal 2017 results. The company posted quarterly earnings of $0.74 a share that beat the Zacks Consensus Estimate of $0.70 and improved 7% from the year-ago period on account of higher operating margin.
Net sales came in at $899.6 million, up 1% from $891.3 million recorded in the prior-year quarter but fell short of the Zacks Consensus Estimate of $916 million. Sturdy sales performance in Asia-Pacific was offset by softness witnessed in the Japan, Americas and Europe. Comparable-store sales (comps) declined 3%. In constant currencies, worldwide net sales jumped 2%, while comps decreased by an equivalent rate.
Let’s Delve Deep
By geographic segments, sales in the Americas fell 3% to $392 million, while comps declined by 4%. Sales in the Asia-Pacific region rose 8% to $257 million, while comps fell 3%. Sales in Japan slipped 2% to $128 million and comps fell by 1%, and sales in Europe came in at $94 million, down 3%, while comps also decreased by a similar rate. Other sales came in at $28 million, up 32%, while comps grew 1%.
Gross margin expanded 80 basis points to 62% during the quarter on account of favorable product input costs and high margin fashion jewelry products, partially offset by rise in wholesale sales of diamonds. Operating margin increased 110 basis points to 16.2%.
Store Update
Tiffany did not open any stores, but shuttered three locations during the quarter. As of Apr 30, 2017, the company operated 310 stores (124 in the Americas, 84 in Asia-Pacific, 54 in Japan, 43 in Europe, and five in the U.A.E.). Management now anticipates gross retail square footage growth of 2% via 10 openings, seven relocations and seven closings.
Other Financial Details
Tiffany ended the quarter with cash and cash equivalents and short-term investments of $960 million, and total short-term and long-term debt of $1,071.1 million, reflecting 35% of shareholders equity.
During the quarter, the company repurchased approximately 123,000 shares at an average cost of about $93 per share. As of Apr 30, 2017, the company had $299 million remaining under its $500 million buyback program that run through Jan 31, 2019. Management anticipates capital expenditures of $250 million and expects to generate free cash flow of approximately $450 million during fiscal 2017.
Guidance
Management now anticipates fiscal 2017 earnings per share to increase by a high-single-digit percentage from fiscal 2016 earnings of $3.55. However, it expects earnings to jump mid-single-digit-percentage over adjusted earnings of $3.75 per share reported in fiscal 2016. Tiffany now envisions fiscal year net sales to increase by a low-single-digit percentage on a reported and constant-exchange-rate basis.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Tiffany & Co. Price and Consensus
VGM Scores
At this time, Tiffany's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. The stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.
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Tiffany (TIF) Up 6.5% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Tiffany & Co. . Shares have added about 6.5% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Tiffany Beats on Q1 Earnings, Sales Miss, View Intact
Tiffany & Co. posted fourth straight quarter of positive earnings surprise, when it reported first-quarter fiscal 2017 results. The company posted quarterly earnings of $0.74 a share that beat the Zacks Consensus Estimate of $0.70 and improved 7% from the year-ago period on account of higher operating margin.
Net sales came in at $899.6 million, up 1% from $891.3 million recorded in the prior-year quarter but fell short of the Zacks Consensus Estimate of $916 million. Sturdy sales performance in Asia-Pacific was offset by softness witnessed in the Japan, Americas and Europe. Comparable-store sales (comps) declined 3%. In constant currencies, worldwide net sales jumped 2%, while comps decreased by an equivalent rate.
Let’s Delve Deep
By geographic segments, sales in the Americas fell 3% to $392 million, while comps declined by 4%. Sales in the Asia-Pacific region rose 8% to $257 million, while comps fell 3%. Sales in Japan slipped 2% to $128 million and comps fell by 1%, and sales in Europe came in at $94 million, down 3%, while comps also decreased by a similar rate. Other sales came in at $28 million, up 32%, while comps grew 1%.
Gross margin expanded 80 basis points to 62% during the quarter on account of favorable product input costs and high margin fashion jewelry products, partially offset by rise in wholesale sales of diamonds. Operating margin increased 110 basis points to 16.2%.
Store Update
Tiffany did not open any stores, but shuttered three locations during the quarter. As of Apr 30, 2017, the company operated 310 stores (124 in the Americas, 84 in Asia-Pacific, 54 in Japan, 43 in Europe, and five in the U.A.E.). Management now anticipates gross retail square footage growth of 2% via 10 openings, seven relocations and seven closings.
Other Financial Details
Tiffany ended the quarter with cash and cash equivalents and short-term investments of $960 million, and total short-term and long-term debt of $1,071.1 million, reflecting 35% of shareholders equity.
During the quarter, the company repurchased approximately 123,000 shares at an average cost of about $93 per share. As of Apr 30, 2017, the company had $299 million remaining under its $500 million buyback program that run through Jan 31, 2019. Management anticipates capital expenditures of $250 million and expects to generate free cash flow of approximately $450 million during fiscal 2017.
Guidance
Management now anticipates fiscal 2017 earnings per share to increase by a high-single-digit percentage from fiscal 2016 earnings of $3.55. However, it expects earnings to jump mid-single-digit-percentage over adjusted earnings of $3.75 per share reported in fiscal 2016. Tiffany now envisions fiscal year net sales to increase by a low-single-digit percentage on a reported and constant-exchange-rate basis.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Tiffany & Co. Price and Consensus
Tiffany & Co. Price and Consensus | Tiffany & Co. Quote
VGM Scores
At this time, Tiffany's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. The stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.