Tiffany (TIF) To Report Q1: Will Its Earnings Lack Luster?

Tiffany & Co. (NYSE:TIF) is scheduled to release first-quarter fiscal 2016 results on May 25. The big question facing investors is, whether this jewelry retailer will be able to deliver a positive earnings surprise in the quarter to be reported. Last quarter, the company had posted a positive earnings surprise of 4.3%. In the trailing four quarters, Tiffany outperformed the Zacks Consensus Estimate by an average of 3%. Let’s see how things are shaping up for this announcement.

Zacks Model Shows Unlikely Earnings Beat

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. Tiffany has an Earnings ESP of -2.94% as the Most Accurate estimate stands at 66 cents, while the Zacks Consensus Estimate is pegged at 68 cents. Tiffany’s Zacks Rank #3 (Hold) increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

Factors Influencing this Quarter

Tiffany holds a significant position in the global jewelry market by virtue of its distinctive brand appeal. We believe that the company’s omni-channel platform and store expansion programs bode well. However, foreign currency headwinds and cautious consumer behavior for discretionary products may dampen its performance in the quarter to be reported.

Tiffany's dwindling top- and bottom-line performance remains the primary concern for investors. A look at the company's performance in fiscal 2015 unveils that earnings per share fell 7.9% and 3% year over year in the third and fourth quarters, respectively. Maintaining the same chronological order, we observe that net sales also declined 2.2% and 6%, respectively. Management had earlier projected earnings to decline by 15%−20% in the first quarter of fiscal 2016.

TIFFANY & CO Price, Consensus and EPS Surprise

TIFFANY & CO Price, Consensus and EPS Surprise | TIFFANY & CO Quote

Stocks Poised to Beat Earnings Estimates

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:

TiVo Inc. (NASDAQ:TIVO) has an Earnings ESP of +25.00% and a Zacks Rank #1 (Strong Buy).

Best Buy Co., Inc. (NYSE:BBY) has an Earnings ESP of +2.86% and a Zacks Rank #2 (Buy).

DSW Inc. (NYSE:DSW) has an Earnings ESP of +2.17% and a Zacks Rank #3.