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Tiffany (TIF) Beats on Q4 Earnings & Sales; Guides FY17
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Tiffany & Co. posted the third straight quarter of positive earnings surprise, when it reported fourth-quarter fiscal 2016 results. This designer and retailer of fine jewelry posted quarterly earnings of $1.45 per share that beat the Zacks Consensus Estimate of $1.37 but were a penny below the year-ago period.
Net sales came in at $1,229.6 million, up 1% from $1,213.6 million recorded in the prior-year quarter. Sales were also ahead of the Zacks Consensus Estimate of $1,224 million. Sturdy sales performance in Asia Pacific and Japan offset sluggishness witnessed in the Americas and Europe.
Comparable-store sales (comps) were unchanged from the year-ago quarter. In constant currencies, worldwide net sales jumped 2%, while comps remained unchanged.
Sluggish consumer spending and lowered sales at Fifth Avenue Flagship Store on account of its proximity to the Trump Tower hurt sales in the Americas. Further, management pointed that though macroeconomic headwinds will prevail in 2017, it will counter the same through strategic initiatives and cost-containment efforts.
Shares are up roughly 3% during the pre-market trading hours. We note Tiffany outperformed the Zacks categorized industry in the past six months. In the said period, the stock has increased 25.4%, while the Retail-Jewelry Stores industry has gained 10.1%.
Let’s Delve Deep
By geographic segments, sales in the Americas fell 3% to $587 million, while comps declined by 2%. Sales in the Asia-Pacific region rose 9% to $284 million, while comps fell 2%. Sales in Japan jumped 15% to $185 million and comps rose by 19%, and sales in Europe came in at $146 million, down 7%, while comps decreased 9%. Other region sales came in at $28 million, down 12%, while comps declined 3%.
Gross margin expanded 110 basis points to 64.1% during the quarter on account of favorable product input costs and increase in price, along with favorable changes in product sales mix. Operating margin contracted 70 basis points to 23.9%.
Store Update
During fiscal 2016, Tiffany opened 11 company-operated outlets and shuttered five locations. As of Jan 31, 2017, the company operated 313 stores (125 in the Americas, 85 in Asia Pacific, 55 in Japan, 43 in Europe, and five in the U.A.E.). Management now anticipates gross retail square footage growth of 3% via 11 openings, nine relocations and six closings.
Other Financial Details
Tiffany ended the quarter with cash and cash equivalents and short-term investments of $985.8 million, and total short-term and long-term debt of $1,107.1 million, reflecting 37% of shareholders equity. Capital expenditures of $223 million were incurred during fiscal 2016.
During fiscal year, the company repurchased approximately 2.8 million shares at an average cost of about $65 per share. As of Jan 31, 2017, the company had $310 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.
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 2017 net sales to increase by a low-single-digit percentage and by a mid-single-digit percentage on a constant-exchange-rate basis.
Zacks Rank
Tiffany currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the retail sector include The Children's Place, Inc. (PLCE - Free Report) , Best Buy Co., Inc. (BBY - Free Report) and Kate Spade & Company . The Children's Place flaunting a Zacks Rank #1 (Strong Buy), while both Best Buy and Kate Spade carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Children's Place delivered an average positive earnings surprise of 39% in the trailing four quarters and has a long-term earnings growth rate of 10.3%.
Best Buy delivered an average positive earnings surprise of 27.7% in the trailing four quarters and has a long-term earnings growth rate of 10.5%.
Kate Spade delivered an average positive earnings surprise of 14.6% in the trailing four quarters and has a long-term earnings growth rate of 28.3%.
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Tiffany (TIF) Beats on Q4 Earnings & Sales; Guides FY17
Tiffany & Co. posted the third straight quarter of positive earnings surprise, when it reported fourth-quarter fiscal 2016 results. This designer and retailer of fine jewelry posted quarterly earnings of $1.45 per share that beat the Zacks Consensus Estimate of $1.37 but were a penny below the year-ago period.
Net sales came in at $1,229.6 million, up 1% from $1,213.6 million recorded in the prior-year quarter. Sales were also ahead of the Zacks Consensus Estimate of $1,224 million. Sturdy sales performance in Asia Pacific and Japan offset sluggishness witnessed in the Americas and Europe.
Comparable-store sales (comps) were unchanged from the year-ago quarter. In constant currencies, worldwide net sales jumped 2%, while comps remained unchanged.
Sluggish consumer spending and lowered sales at Fifth Avenue Flagship Store on account of its proximity to the Trump Tower hurt sales in the Americas. Further, management pointed that though macroeconomic headwinds will prevail in 2017, it will counter the same through strategic initiatives and cost-containment efforts.
Shares are up roughly 3% during the pre-market trading hours. We note Tiffany outperformed the Zacks categorized industry in the past six months. In the said period, the stock has increased 25.4%, while the Retail-Jewelry Stores industry has gained 10.1%.
Let’s Delve Deep
By geographic segments, sales in the Americas fell 3% to $587 million, while comps declined by 2%. Sales in the Asia-Pacific region rose 9% to $284 million, while comps fell 2%. Sales in Japan jumped 15% to $185 million and comps rose by 19%, and sales in Europe came in at $146 million, down 7%, while comps decreased 9%. Other region sales came in at $28 million, down 12%, while comps declined 3%.
Gross margin expanded 110 basis points to 64.1% during the quarter on account of favorable product input costs and increase in price, along with favorable changes in product sales mix. Operating margin contracted 70 basis points to 23.9%.
Store Update
During fiscal 2016, Tiffany opened 11 company-operated outlets and shuttered five locations. As of Jan 31, 2017, the company operated 313 stores (125 in the Americas, 85 in Asia Pacific, 55 in Japan, 43 in Europe, and five in the U.A.E.). Management now anticipates gross retail square footage growth of 3% via 11 openings, nine relocations and six closings.
Other Financial Details
Tiffany ended the quarter with cash and cash equivalents and short-term investments of $985.8 million, and total short-term and long-term debt of $1,107.1 million, reflecting 37% of shareholders equity. Capital expenditures of $223 million were incurred during fiscal 2016.
During fiscal year, the company repurchased approximately 2.8 million shares at an average cost of about $65 per share. As of Jan 31, 2017, the company had $310 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.
Tiffany & Co. Price, Consensus and EPS Surprise
Tiffany & Co. Price, Consensus and EPS Surprise | Tiffany & Co. Quote
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 2017 net sales to increase by a low-single-digit percentage and by a mid-single-digit percentage on a constant-exchange-rate basis.
Zacks Rank
Tiffany currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the retail sector include The Children's Place, Inc. (PLCE - Free Report) , Best Buy Co., Inc. (BBY - Free Report) and Kate Spade & Company . The Children's Place flaunting a Zacks Rank #1 (Strong Buy), while both Best Buy and Kate Spade carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Children's Place delivered an average positive earnings surprise of 39% in the trailing four quarters and has a long-term earnings growth rate of 10.3%.
Best Buy delivered an average positive earnings surprise of 27.7% in the trailing four quarters and has a long-term earnings growth rate of 10.5%.
Kate Spade delivered an average positive earnings surprise of 14.6% in the trailing four quarters and has a long-term earnings growth rate of 28.3%.
5 Trades Could Profit ""Big-League"" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure.See these buy recommendations now >>