Diamonds Aren't an Investor's Best Friend: Tiffany (TIF) Slips on Lowered FY12 Expectations
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Price: $131.46 --0%
Financial Fact:
Provision for income taxes: 50.4M
Today's EPS Names:
SFST, VLTO, CLIR, More
Financial Fact:
Provision for income taxes: 50.4M
Today's EPS Names:
SFST, VLTO, CLIR, More
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Tiffany & Co. (NYSE: TIF) shares are getting hit in early trading today following third-quarter 2012 results and lowered outlook issued earlier.
Sales for the three-months ended October 31st rose 3.8 percent to $852.74 million, while net earnings dropped 30 percent to $63.18 million, or 49 cents per share.
The Street consensus pegged revs at $857.5 million and earnings of 63 cents per share.
CEO Michael J. Kowalski noted that "gross margin was weaker than we expected and Tiffany’s effective tax rate was higher than we expected." Indeed, gross margins slipped 350 basis points to 54.4 percent in the quarter. "The declines largely resulted from continued high precious metal and diamond costs, sales mix favoring higher-priced, lower margin products, and reduced sales leverage on fixed costs," Tiffany said.
Americas sales rose 3 percent in the period, while Asia-Pacific sales rose just 2 percent.
Kowalski also commented the Tiffany maintains a cautious near-term outlook, though the company expects improving results in the holiday season.
For fiscal 2012, EPS is expected to be $3.20 to $3.40, down from prior expectation of $3.55 to $3.70 and the Street consensus of $3.60. Global sales outlook is lowered from 6 percent to 7 percent growth down to 5 percent to 6 percent growth.
The stock is down nearly 14 percent ahead of the bell.
Sales for the three-months ended October 31st rose 3.8 percent to $852.74 million, while net earnings dropped 30 percent to $63.18 million, or 49 cents per share.
The Street consensus pegged revs at $857.5 million and earnings of 63 cents per share.
CEO Michael J. Kowalski noted that "gross margin was weaker than we expected and Tiffany’s effective tax rate was higher than we expected." Indeed, gross margins slipped 350 basis points to 54.4 percent in the quarter. "The declines largely resulted from continued high precious metal and diamond costs, sales mix favoring higher-priced, lower margin products, and reduced sales leverage on fixed costs," Tiffany said.
Americas sales rose 3 percent in the period, while Asia-Pacific sales rose just 2 percent.
Kowalski also commented the Tiffany maintains a cautious near-term outlook, though the company expects improving results in the holiday season.
For fiscal 2012, EPS is expected to be $3.20 to $3.40, down from prior expectation of $3.55 to $3.70 and the Street consensus of $3.60. Global sales outlook is lowered from 6 percent to 7 percent growth down to 5 percent to 6 percent growth.
The stock is down nearly 14 percent ahead of the bell.
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