After suffering weak sales during the holiday season,Tiffany & Co. (TIF) announced that it is lowering its adjusted earnings-per-share guidance for fiscal year 2014.
Is now a good time to buy Tiffany on a dip, or is this just the tip of TIF stock’s problems?
Tiffany & Co. – Company Profile
Characterized by its powder blue gift boxes, Tiffany & Co. is a globally recognized name in high-end jewelry, especially diamonds. With its headquarters in New York City, Tiffany employs 10,600 employees around the world.
Tiffany & Co. was one of the few high-end retailers that refused to discount its merchandise during the recession, going so far as to state that to do so would be a breach of trust and a lessening of the value of its brand.
In the years since the recession, Tiffany & Co. made a comeback, but given the latest quarter’s results, it looks like further trouble is ahead for TIF stock.
Tiffany & Co. – Earnings Buzz
In the third quarter, Tiffany & Co. reported adjusted earnings of 76 cents per share on net sales of $959.59 million. So, last quarter’s earnings were unchanged over last year while net sales increased 5%.
Unfortunately, Tiffany & Co. lost momentum during the holiday season, which will likely weigh on Q4 results. During the two-month holiday period, TIF stock’s sales slipped 1% to $1.02 billion.
Now, Tiffany’s expects adjusted EPS of $4.15 to $4.20 for fiscal year 2014, compared to the previous forecast of $4.20 to $4.30 per share.
Tiffany & Co. – Current Ratings
Before you buy any stock, you should always run it through my free Portfolio Grader ratings system. Fundamentally, Tiffany has a poor track record when it comes to its financial statements.
Of the eight fundamental metrics I graded it on, TIF outright failed on two: Operating margin growth and earnings growth. TIF also earns a D grade for earnings surprises, while sales growth, analyst earnings revisions and cash flow earn C-grades.
The only area that Tiffany & Co. excels at is its A-rated return on equity. On average, TIF earns a C for its overall Fundamental Grade. Meanwhile, TIF receives a B for its Quantitative Grade.
As of this posting, Jan. 14, I consider TIF a C-rated “hold.” However, given how lackluster Tiffany & Co.’s fundamentals are, I wouldn’t be surprised to see TIF stock fall to a D-rated “sell” in upcoming weeks.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
