Tuesday, November 23, 2010

Tiffany & Co. (NYSE:TIF) Margins, Earnings, Revenue Should Exceed Expectations

A review of Tiffany & Co. (NYSE:TIF) by Barclays (NYSE:BCS) suggests when the retailer reports its third-quarter earnings, revenue, margins and earnings should exceed their expectations and estimates.

Barclays said, Tiffany will report 3Q10 EPS on Wednesday, November 24 before the market open. We believe our EPS estimate of $0.36 could prove conservative. Importantly, our estimate incorporates the increased marketing spend planned for 3Q10, some of which was tied to a major customer and media event in Beijing. We expect Tiffany revenues to increase 8.0% to $646.2 million in 3Q10, driven by a an almost 8% sales increase in the U.S. to $327.1 million and more than a 20% increase in Asia ex-Japan to $125.3 million...Importantly, we expect another strong gross margin increase of 150 bps to 56.3% as the company continues to benefit from its February 2010 price increases."

Tiffany closed Monday at $59.22, rising by $1.19, or 2.05 percent. Barclays has a price target of $64 on them, increasing it from $55.

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