Tiffany & Co. (TIF) Tops Q4 EPS by 3c, Comps Increase 1%

Tiffany & Co. (NYSE: TIF) reported Q4 EPS of $1.67, $0.03 better than the analyst estimate of $1.64. Revenue for the quarter came in at $1.33 billion versus the consensus estimate of $1.31 billion.

On a constant-exchange-rate basis, worldwide net sales rose 6% and comparable store sales were 1% above the prior year.

Fiscal 2018 Outlook:

Management’s guidance for fiscal 2018 includes: (i) worldwide net sales increasing by a mid-single-digit percentage over the prior year both as reported and on a constant-exchange-rate basis; (ii) earnings before income taxes equal to or slightly below the prior year; (iii) net earnings increasing to a range of $4.25 - $4.45 per diluted share and (iv) net earnings and EPS increasing in the first quarter with subsequent quarters’ earnings over the balance of the year affected by the amount and timing of anticipated higher investment spending. These expectations are approximations and are based on the Company’s plans and assumptions for the full year, including: (i) low-to-mid-single-digit comparable sales growth (which, beginning in 2018, will include Company-operated stores, e-commerce and catalog sales for the periods that are presented), with varying degrees of growth in all regions; (ii) worldwide gross retail square footage increasing 2%, net through nine store openings, two closings and at least 15 relocations; (iii) operating margin below the prior year as a result of SG&A expense growth (affected by higher investment spending in technology, marketing communications, visual merchandising, digital and store presentations) at a higher rate than sales growth, partly offset by a higher gross margin; (iv) interest and other expenses, net in line with the prior year; (v) an effective income tax rate in the high 20’s; (vi) no meaningful effect in fiscal 2018 from the U.S. dollar versus foreign currencies on a year-over-year basis; and (vii) minimal benefit to net earnings per diluted share from share repurchases.

Management also expects: (i) net cash provided by operating activities of $660 million and (ii) free cash flow (see “Non-GAAP Measures”) of $380 million. These expectations are approximations and are based on the Company’s plans and assumptions for the full year, including: (i) net inventories increasing approximately in line with sales growth, (ii) capital expenditures of $280 million and (iii) net earnings in line with management’s expectations, as described above.

For earnings history and earnings-related data on Tiffany & Co. (TIF) click here.

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