Tiffany & Co. (TIF) Tops Q1 EPS by 31c, Updates Guidance, Approves $1B Buyback
Tiffany & Co. (NYSE: TIF) reported Q1 EPS of $1.14, $0.31 better than the analyst estimate of $0.83. Revenue for the quarter came in at $1 million versus the consensus estimate of $958.17 million.
Worldwide net sales increased 15% to $1.0 billion, resulting from broad-based sales growth; comparable sales increased 10%. On a constant-exchange-rate basis that excludes the effect of translating foreign-currency-denominated sales into U.S. dollars (see “Non-GAAP Measures”), worldwide net sales and comparable sales rose 11% and 7%, respectively.
GUIDANCE:
Tiffany & Co. sees FY2018 EPS of $4.50-$4.70, versus the consensus of $4.42.
- worldwide net sales increasing by a high-single-digit percentage over the prior year both as reported and on a constant-exchange-rate basis
- These expectations are approximations and are based on the Company’s plans and assumptions for the full year, including: (i) mid-to-high-single-digit comparable sales growth, with varying degrees of growth in all regions; (ii) worldwide gross retail square footage increasing 2%, net through eight store openings, two closings and at least 15 relocations; (iii) operating margin below the prior year as a result of significant SG&A expense growth (affected by anticipated higher investment spending in technology, marketing communications, visual merchandising, digital and store presentations) at a higher rate than sales growth for the remainder of the year, 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) net earnings and EPS over the balance of the year affected by the amount and timing of the anticipated higher investment spending; (vii) no meaningful effect in fiscal 2018 from the U.S. dollar versus foreign currencies on a year-over-year basis; and (viii) some benefit to net earnings per diluted share from share repurchases.
New Share Repurchase Program
The Company’s Board of Directors has approved a new share repurchase program that authorizes the repurchase of up to $1.0 billion of the Company’s Common Stock through open market transactions, including through Rule 10b5-1 plans and one or more accelerated share repurchase or other structured repurchase transactions, and/or privately negotiated transactions. Purchases under this new program are discretionary and will be made from time to time based on market conditions and the Company’s liquidity needs. This new program, which expires on January 31, 2022, will replace the Company’s existing share repurchase program announced in January 2016.
Under this new program, the Company’s Board of Directors also approved the repurchase of $250 million of the Company’s Common Stock through an accelerated share repurchase transaction which the Company expects to enter into during its fiscal quarter ending July 31, 2018, subject to market conditions
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