Tiffany & Co. (TIF - Free Report) , which holds a significant position in the global jewelry market, took a bold step in a bid to ramp up sales by appointing former Diesel as well as Bulgari’s chief executive Alessandro Bogliolo as the CEO of the company. Bogliolo is expected to take office by Oct 2, 2017. Following the news, Tiffany’s shares gained roughly 2%. The company hopes to boost sales performance under the new CEO.
We note that sales performance of this Zacks Rank #4 (Sell) company has not been spectacular in the past few quarters. In first-quarter fiscal 2017, sales increased only 1% and also missed the Zacks Consensus Estimate. In both fourth and third quarter of fiscal 2016, sales have inched up 1% each, while in the second and first quarter sales declined 8% and 9%, respectively.
We also note that sales in Americas and Europe have declined for five straight quarters now with 3% drop recorded for each region in first-quarter fiscal 2017. Further, sales in Americas fell 3%, 2%, 9% and again 9% in the fourth, third, second and first quarters of fiscal 2016, respectively. Maintaining the same chronological order we observed that sales in Europe dropped 7%, 10%, 12% and 9%, respectively.
Moreover, a mature domestic market, foreign currency headwinds and cautious consumer spending also remain causes of concern. All these factors have hurt the stock that gained only 2.8% in the past three months but managed to outperform the Zacks categorized Retail-Jewelry Stores industry that declined 0.5%.
There is no doubt that the current jewelry industry scenario is tough due to declining retail traffic and soft demand for Jewelry but Bogliolo’s rich experience in the luxury industry can help Tiffany to reinforce its position. Notably, Bogliolo has 16 years’ experience in luxury jewelry and watch firm Bulgari, and most recently he served as CEO of global apparel and accessories company, Diesel SpA. During his tenure at Diesel he not only helped the company to rejuvenate its brand but also enriched consumer experience. Bogliolo also has the experience of working in countries like Spain, China, Italy, Singapore, France, and U.S.
We hope that the company will be able to bring about a turnaround in performance under the new CEO. Moreover, Tiffany's strategic initiatives like omni-channel platform, store expansion plans, tapping of new markets and venturing into new revenue generating will act as catalysts.
Some Shining Stars in the Retail Space
Better-ranked stocks which warrant a look in the retail space include G-III Apparel Group, Ltd. (GIII - Free Report) , Guess', Inc. (GES - Free Report) and The Children's Place, Inc. (PLCE - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
G-III Apparel Group has an impressive long-term earnings growth rate of 15%.
Guess' has an impressive long-term earnings growth rate of 17.5% and also surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average earnings beat of 33%.
The Children's Place has reported earnings beat in the trailing four quarters, with an average of 36.6%.
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