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Sydnee Gatewood
Sydnee Gatewood
Articles (532) 

Demand in China Makes Tiffany’s Sales Sparkle

Jeweler beats earnings, revenue expectations

November 29, 2017 | About:

In its first quarter under new CEO Alessandro Bogliolo, high-end jeweler Tiffany & Co. (NYSE:TIF) reported its third-quarter earnings before the opening bell on Nov. 29.

The New York-based company posted earnings per share of 80 cents, beating estimates of 76 cents. Quarterly revenue of $976.2 million beat expectations of $957 million and grew 3% from the prior-year quarter.

Despite the beat, shares slipped 0.4% to $93.36 in premarket trading following the announcement. It closed at $94.04 on Tuesday.

The trend in the company’s revenue growth over the past decade is illustrated in the graph below.

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Tiffany reported total sales in the Asia-Pacific region increased 15%, boosted by demand in mainland China, and 1% in the Americas. While overall comparable sales declined 1% from the prior-year quarter, the Asia-Pacific region reported a 2% increase in same-store sales. Same-store sales in the Americas, Japan and Europe declined during the quarter.

Bogliolo said the company’s results “marginally exceeded our expectations” and believes it has the “potential to achieve meaningful comparable store sales growth and drive higher operating margins and earnings growth.”

"Looking forward, we will increasingly capitalize on the strength of the Tiffany & Co. brand with stronger organizational focus on innovation in product, digital, communication and the customer experience," he said.

Tiffany reported it spent $28 million during the quarter on repurchasing 300,000 shares. It distributes a quarterly dividend of 50 cents per share with a payout ratio of 50%. The company’s trailing dividend yield is 2.02% and its forward dividend yield is 2.14%.

The company reiterated its sales and earnings guidance for fiscal 2017. It anticipates low single-digit revenue growth and high single-digit EPS growth.

Of the 11 gurus invested in Tiffany, First Eagle Investment (Trades, Portfolio) has the largest holding with 3.1% of outstanding shares. Steven Cohen (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), George Soros (Trades, Portfolio) and Ray Dalio (Trades, Portfolio) established positions in the third quarter.

With a market cap of $11.55 billion, Tiffany’s shares were trading around $92.77 on Wednesday with a price-earnings (P/E) ratio of 25.20, a price-book (P/B) ratio of 3.68 and a price-sales (P/S) ratio of 2.87. According to GuruFocus, the stock has gained approximately 20% year to date.

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Disclosure: I do not own any stocks mentioned.

About the author:

Sydnee Gatewood
I am an editorial assistant at GuruFocus. I have a BA in journalism and a MA in mass communications from Texas Tech University. I have lived in Texas most of my life, but also have roots in New Mexico and Colorado. Follow me on Twitter! @gurusydneeg

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