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Last Update: 27-Aug-12 09:16 ET
Tiffany shares shine despite miss on EPS and lowered FY13 guidance
Tiffany & Co (TIF $61.62 +3.12) reported second quarter earnings of $0.72 per share, $0.02 worse than the Capital IQ Consensus Estimate of $0.74, while revenues rose 1.6% year/year to $886.6 million versus the $892.38 million consensus (+3% ex-FX), comps -1%. Sales in the Americas and Asia-Pacific rose 1%, +11% in Japan and -1% in Europe. The company issued guidance for fiscal year 2013 with lowered EPS to $3.55-3.70 from $3.70-3.80 versus the $3.69 Capital IQ consensus. Management continues to expect an earnings decline in the third quarter followed by a resumption of growth in the fourth quarter. This expectation is based on the following assumptions: 1) Worldwide net sales (in U.S. dollars) increasing 6-7% versus the previous expectation calling for 7-8% growth (as reported consensus +6.3%), due to a moderation in assumed fourth quarter sales growth. 2) Adding a total of 28 Company-operated stores including 13 in the Americas, eight in Asia-Pacific, two in Europe, and commencing operation of five stores in the United Arab Emirates. This includes 13 stores that were already added in the first half of the year. 3) The operating margin below the 20.6% achieved in 2011 (excluding nonrecurring costs) due to a decline in the gross margin.
