Why Tiffany Fell Short in Q4

Tiffany & Co. (NYSE: TIF) released its fiscal fourth-quarter financial results before the markets opened on Friday. The firm said that it had $1.60 in earnings per share (EPS) and $1.32 billion in revenue, which compares with consensus estimates that called for $1.61 in EPS and revenue of $1.34 billion. In the same period of last year, the specialty retailer said it had EPS of $1.67 and $1.33 billion in revenue.

During the most recent quarter, worldwide net sales declined by 1% year over year. This was generally consistent with holiday results previously reported on January 18 and was attributed by management to softer demand by local customers and foreign tourists across most regions and product categories. Also, comparable sales declined by 1%.

In terms of its segments for the quarter, Tiffany reported as follows:

  • Americas total net sales were roughly unchanged at $618 million.
  • Asia-Pacific total net sales declined 1% to $316 million.
  • Japan total net sales increased 3% to $196 million.
  • Europe total net sales declined 3% to $162 million.

Looking ahead to the fiscal 2019 full year, the firm expects to see worldwide net sales increasing by a low-single-digit percentage, and EPS is expected to increase by a mid-single-digit percentage. Consensus estimates call for $4.93 in EPS and $4.58 billion in revenue for the year.

CEO Alessandro Bogliolo commented:

Most important, we are still in the early stages of a journey to achieve long-term sales, margin and earnings growth for this legendary brand, and are making progress across our six key strategic priorities: Amplifying an evolved brand message; Renewing our product offerings and enhancing in-store presentations; Delivering an exciting omnichannel customer experience; Strengthening our competitive position and leading in key markets; Cultivating a more efficient operating model; and Inspiring an aligned and agile organization to win. I continue to strongly believe that Tiffany has vast global growth opportunities and we look forward to realizing our full potential in the future.

Shares of Tiffany closed Thursday at $100.06, in a 52-week range of $73.04 to $141.64. The consensus price target is $106.95. Following the announcement, the stock was down about 4% at $96.35 in early trading indications Friday.