Consumer Products

Why the Future of Jewelry in America Has Very Little Shine

A couple major players in the jewelry industry reported quarterly results this week, and it seems that all that glitters is not gold, or diamonds for that matter. Although earnings looked in line for these companies, this was far from the truth. One of the contributing factors is that younger consumers seem to care less about having $10,000 on their wrists or fingers than prior generations.

Tiffany & Co. (NYSE: TIF) released its fiscal fourth-quarter earnings report before the markets opened on Friday, and Signet Jewelers Ltd. (NYSE: SIG) reported its results on Wednesday morning.

Tiffany posted $1.67 in earnings per share (EPS) on $1.33 billion in revenue, which compared with consensus estimates from Thomson Reuters of $1.64 in EPS on revenue of $1.31 billion. The same period of last year reportedly had EPS of $1.45 and $1.23 billion in revenue.

During the quarter, worldwide net sales rose 9%, resulting from growth in all regions and across all product categories, and comparable store sales rose 3%. On a constant-exchange-rate basis, worldwide net sales rose 6% and comparable store sales were 1% above the prior year.

In terms of the guidance for the fiscal 2018 full year, Tiffany expects to see EPS in the range of $4.25 to $4.45 and low-to-mid-single-digit comparable sales growth. The consensus estimates call for $4.38 in EPS on $4.37 billion in revenue.

Signet reported $4.28 in EPS, which beat the Thomson Reuters poll of $4.25 per share. Its total sales rose 1% to $2.29 billion, and that topped expectations for $2.24 billion. Unfortunately, that 1% gain was driven by an extra week in the cycle and an acquisition. To prove the point: Signet said that its same-store sales were down a sharp 5.2%, versus a consensus forecast of a 5.1% drop. Check out the full Signet report.

Shares of Tiffany traded early Friday at $95.51, down 7% on the day, with a consensus analyst price target of $111.85 and a 52-week trading range of $84.15 to $111.44.

Signet shares were last seen at $38.01, with a consensus price target of $45.27 and a 52-week range of $37.42 to $77.94.