Tiffany Exceeds Fiscal Goals for 2011 Year-End, Analysts Remain Skeptical

As Tiffany & Co.

struggled to measure up to competitors

it came as a shock to many that the company reported almost 20% sales and earnings growth for its 2011 fiscal year ending on January 31, 2012. While numbers were mostly in-line with projections made by TIF, it was the positive 2012 outlook reported on the March 20 conference call that has analysts remaining hesitant with the stock. In a research report published earlier today, Jefferies commented on Tiffany's shaky 4Q results and what the future holds for the company. “We remain on [the] sidelines for now but.... after several very strong quarters, we believe TIF is at an inflection point and beginning to show a slowdown in trends during 4Q as it faces more difficult compares and softening demand in the US and Europe. This should put a damper on upward earnings bias over the coming quarters,” Jefferies commented, maintaining its Hold rating and $65 PT. Although the retailer was able to pull itself together and bring in solid numbers for 2011, there was a point during the holiday season when analysts were beginning to doubt that the company would be able to function much longer, according to

"That was the first warning that the luxury party was coming to an end, but now it seems it was just a speed bump," said Morningstar analyst Paul Swinand. Luckily for TIF, it appears those worries have been tabled for the moment, as CEO Michael J. Kowalski celebrates the retailer's earnings and promises to sustain and build on its current standing over the next few years. “Tiffany exceeded the goals that we had set at the start of 2011 for both sales and earnings growth, although we concluded the year with softer-than-expected results,” he said on the conference call. “Nonetheless, we remain focused on successfully executing our long-term strategies and pursuing Tiffany's substantial global growth potential in 2012 and beyond.” Meanwhile, one of Tiffany's chief competitors, Michael Kors Holdings

is attempting to warn analysts of its potential upcoming lag in shipments. The luxury brand has decided to convert from a legacy warehouse system to a new system that has taken longer than expected to incorporate. Due to the lack of movement, KORS management warned that shipments may be delayed in the near future – but analysts are not necessarily buying the cautious statement. Wedbush commented in a research report earlier today, “We do not view today's announcement that shipping delays “may result” as a significant misstep and believe that the language is a disclosure hedge given the upcoming pricing of the secondary. Further, we note that in the press release, management does not quantify any impact on the current quarter or indicate what the potential impact could be on the upcoming first quarter. In short, we believe the disclosure could provide an appealing entry opportunity for Secondary participants.” Michael Kors Holdings is currently trading at $45.09, down -5.41% YOY. Tiffany & Co. is currently trading at $73.74, up +29.01% YOY.