What You Should Know Ahead Of Tiffany's (TIF) Q1 Earnings

Tiffany & Co. (NYSE:TIF) , which designs, manufactures and retails jewelry and other items globally, is slated to report first-quarter fiscal 2017 results on May 24. Barring the first quarter of fiscal 2016, the company has outpaced the Zacks Consensus Estimate in the second, third and fourth quarters by 18.3%, 13.4% and 5.8%, respectively. In the first quarter, the company posted negative earnings surprise of 5.9%. Let’s see how things are shaping up for this announcement.

What to Expect?

Investors are keen to find out whether Tiffany manages to post a positive earnings surprise in the quarter to be reported. In the trailing four quarters, Tiffany outperformed the Zacks Consensus Estimate by an average of 7.9%. The current Zacks Consensus Estimate for the quarter under review is 70 cents, reflecting a year-over-year increase of over 9%. We noted that the Zacks Consensus Estimate has been stable in the past 30 days. Analysts polled by Zacks expect revenues of $908.9 million, up about 2% from the year-ago quarter.

Factors at Play

We believe Tiffany’s omni-channel platform, store expansion programs, tapping of new markets and venturing into new revenue generating avenues have helped improve performance, as evident from the positive earnings surprises delivered in the past three quarters. These enabled the stock to outpace the industry in the past six months. In the said time frame, the stock has surged 17.3%, while the Zacks categorized Retail-Jewelry Stores industry has declined 5%.

Management had earlier pointed that though macroeconomic headwinds will prevail in fiscal 2017, it will counter the same through strategic initiatives and cost containment efforts. We believe that a mature domestic market, foreign currency headwinds and cautious consumer spending still remain causes of concern for the company. Tiffany’s performance in the Americas and Europe unveils a dismal picture.

What the Zacks Model Unveils?

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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Tiffany has an Earnings ESP of -2.86% as the Most Accurate estimate stands at 68 cents, while the Zacks Consensus Estimate is pegged higher at 70 cents. The company carries a Zacks Rank #3, which increases the predictive power. However, we need to have a positive ESP to be confident about an earnings surprise.

Where You Should Focus?

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:

Best Buy Co., Inc. (NYSE:BBY) has an Earnings ESP of +10.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Burlington Stores, Inc. (NYSE:BURL) has an Earnings ESP of +2.86% and a Zacks Rank #2.

Ulta Beauty, Inc. (NASDAQ:ULTA) has an Earnings ESP of +0.56% and a Zacks Rank #2.

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