Tiffany's Q3 Release Likely To Show The Fruit Of Its Efficiency Efforts

Deutsche Bank expects the third-quarter results of Tiffany & Co. TIF to show the fruits of the company’s continued efforts on productivity and efficiencies. Tiffany, a jeweler and specialty retailer, will release its third-quarter numbers on November 29.

Quarterly Expectations

The Street expects third-quarter EPS of $0.67 on revenue of $924.64 million. Deutsche Bank projects EPS of $0.72, sales of $926 million, and 4 percent drop in comps. The brokerage also sees underlying improvement driven by the U.K. and China.

“Sales in 2H should improve relative to 1H thanks to product and brand initiatives and easier comps,” analyst Francesca Di Pasquantonio wrote in a note.

A Look Forward

Looking ahead, the analyst expects a seasonally strong fourth quarter, which historically accounts for 40 percent of Tiffany’s annual profits. The analyst is positive on strong fourth quarter despite short-term concerns regarding traffic in the NY flagship store that represents 8 percent of total sales.

The company guided FY EPS down in mid-single-digits. For the fourth quarter, the analyst looks for 5 percent increase in EBIT, 3.8 percent rise in sales and 1 percent comp growth.

“We have confidence that new product flow, brand and marketing initiatives, the roll out of a new store format offering an improved shopping experience, a more customer-centric platform, and the continued efforts on productivity and efficiencies are starting to pay out,” Di Pasquantonio added.

Rating And Valuation

Di Pasquantonio has a Hold rating on Tiffany with a price target of $75.50, while the shares, at last check, rose 1.34 percent to $77.35.