Tiffany & Co. (NYSE:TIF) is scheduled to release second-quarter fiscal 2016 results on Aug 25. The question in investors’ minds now 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 negative earnings surprise of 5.9%. In the trailing four quarters, Tiffany underperformed the Zacks Consensus Estimate by an average of 2.9%. 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 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Tiffany has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 71 cents. Moreover, the company carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Factors Influencing this Quarter
Tiffany holds an important 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 weak top and bottom-line performance remain 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 quarter, respectively. Maintaining the same chronological order we observe that net sales also dipped 2.2% and 6%, respectively. Fiscal 2016 also witnessed a sluggish start as earnings per share plunged 21%, while net sales declined 7% in the first quarter. Tiffany had earlier projected second quarter earnings to decline at a rate equivalent to that of the first quarter.
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:
Dollar Tree, Inc. (NASDAQ:DLTR) has an Earnings ESP of +4.11% and a Zacks Rank #2.
Best Buy Co., Inc. (NYSE:BBY) has an Earnings ESP of +4.76% and a Zacks Rank #3.
GameStop Corp. (NYSE:GME) has an Earnings ESP of +3.85% and a Zacks Rank #3.
BEST BUY (BBY): Free Stock Analysis Report
GAMESTOP CORP (GME): Free Stock Analysis Report
DOLLAR TREE INC (DLTR): Free Stock Analysis Report
TIFFANY & CO (TIF): Free Stock Analysis Report
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