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Is Tiffany (TIF) Ready to Sparkle Again in Q3 Earnings?

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Tiffany & Co. , which designs, manufactures and retails jewelry and other items globally, is slated to report third-quarter fiscal 2017 results on Nov 29. In the second quarter, the company posted positive earnings surprise of 4.6%. Let’s see how things are shaping up for this announcement.

Which Way are Estimates Treading?

Investors are keen to find out whether Tiffany will be able to sustain its positive earnings surprise streak in the quarter to be reported. In the trailing four quarters, it had outperformed the Zacks Consensus Estimate by an average of 7.4%. The current Zacks Consensus Estimate for the quarter under review has decreased by a penny in the last seven days and is pegged at 76 cents, which is in line with the prior-year quarter figure. Analysts polled by Zacks expect revenues of $960 million, up more than 1% year over year.

Factors at Play

Tiffany’s omni-channel platform, store expansion programs, new design launches, tapping of new markets and venturing into new revenue generating avenues bode well for the stock. The company is well positioned to augment its top and bottom-line performance in the long run by leveraging capital investments made over the past several years in distribution, manufacturing and diamond sourcing processes.

Analysts anticipate sales trends to improve across all operating regions. Per analysts surveyed by Zacks, revenues at Americas, Asia-Pacific, Europe and Japan are likely to increase 2.6%, 7.7%, 11.5% and 1.3%, respectively, during the third quarter.

However, Tiffany’s comparable-store sales (comps) have been struggling for quite some time now. In the first and second quarters of fiscal 2017, comps have declined 3% and 2%, respectively. Moreover, foreign currency headwinds and cautious consumer spending also remain causes of concern. However, the company plans to counter these obstacles through strategic initiatives and cost containment efforts.

Tiffany & Co. Price, Consensus and EPS Surprise

 

Tiffany & Co. Price, Consensus and EPS Surprise | Tiffany & Co. Quote

What the Zacks Model Unveils?

Our proven model shows that Tiffany is likely to beat estimates this quarter. This is because a stock needs to have both — a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Tiffany has an Earnings ESP of +6.16% and carries a Zacks Rank #2. This makes us reasonably confident that the bottom line is likely to outperform estimates.

Other Stocks With Favorable Combination

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

Zumiez Inc. (ZUMZ - Free Report) has an Earnings ESP of +0.69% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

American Eagle Outfitters, Inc. (AEO - Free Report) has an Earnings ESP of +1.04% and a Zacks Rank #2.

G-III Apparel Group, Ltd. (GIII - Free Report) has an Earnings ESP of +1.44% and a Zacks Rank #3.

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