Tiffany & Co. TIF is slated to report fourth-quarter fiscal 2014 results on Mar 20. In the last quarter, the company had delivered a negative earnings surprise of 1.3%. Let’s see how things are shaping up for this announcement.
Factors Influencing This Quarter
Tiffany’s dismal holiday sales performance in 2014 is likely to have an impact on the overall quarterly performance. The company’s holiday sales fell 1% as against 4% growth witnessed in 2013. Currency headwinds, along with soft sales in the Americas and Japan, were the primary reasons behind the decline. Given a subdued performance, management trimmed its earnings per share forecast for fiscal 2014. Management now envisions fiscal 2014 earnings per share in the range of $4.15–$4.20 as against its earlier projection of $4.20–$4.30. Moreover, the company stated that it will maintain a cautious stance for fiscal 2015 as well.
Earnings Whispers
Our proven model does not conclusively show that Tiffany is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: Tiffany currently has an Earnings ESP of -0.67%. This is because the Most Accurate estimate stands at $1.49 and the Zacks Consensus Estimate is pegged at $1.50.
Zacks Rank: Tiffany carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
G-III Apparel Group, Ltd. GIII has an Earnings ESP of +2.41% and a Zacks Rank #2 (Buy).
Darden Restaurants, Inc. DRI has an Earnings ESP of +1.19% and a Zacks Rank #2.
Sonic Corp. SONC has an Earnings ESP of +8.33% and a Zacks Rank #2.
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