{"id":69991,"date":"2015-03-23T17:42:16","date_gmt":"2015-03-23T21:42:16","guid":{"rendered":"http:\/\/countingpips.com\/?p=69991"},"modified":"2015-03-23T19:46:55","modified_gmt":"2015-03-23T23:46:55","slug":"strong-dollar-blamed-for-tiffany-revenue-dip","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2015\/03\/strong-dollar-blamed-for-tiffany-revenue-dip\/","title":{"rendered":"Strong Dollar Blamed for Tiffany Revenue Dip"},"content":{"rendered":"
March 23, 2015<\/div>
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By WallStreetDaily.com<\/span><\/a> \"Tiffany<\/p>\n

By Richard Robinson<\/a>, Ph.D., Equities Analyst <\/em><\/p>\n

Tiffany & Company<\/strong> (TIF<\/a>) shares dropped nearly 4% on Friday.<\/p>\n

Shares closed at $82.93, or $3.44 lower than the previous day.<\/p>\n

The stock is now down more than 22.3% this year. That puts it just above Tiffany\u2019s 52-week low of $82.75.<\/p>\n

The sudden dip came on the heels of the company\u2019s fourth-quarter earnings report. Tiffany reported that quarterly sales fell for the first time in five years.<\/p>

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It turns out that tourists refuse to visit the company\u2019s flagship store in Manhattan, which drives about 40% of Tiffany\u2019s sales.<\/p>\n

Why are they steering clear?<\/p>\n

Tiffany claims that tourists aren\u2019t coming to the Manhattan store because the U.S. dollar is so strong right now<\/a>.<\/p>\n

Of course, the dollar has become a key theme in each earnings report since the middle of 2014.<\/p>\n

The Dark Side to the Dollar\u2019s Strength<\/h2>\n

A stronger dollar transfers demand from the United States to other economies around the world.<\/p>\n

Which means that U.S. companies relying heavily on foreign customers could face significant headwinds in 2015.<\/p>\n

The prices of American products become more expensive relative to local currencies as the dollar continues to gain strength.<\/p>\n

This is exactly what happened to Tiffany.<\/p>\n

Now, while Tiffany achieved solid growth in net sales and net earnings for the full year<\/em>, the fourth-quarter results were less impressive.<\/p>\n

The company said Q4 revenue declined 1% to $1.3 billion, which is the lowest year-over-year revenue growth rate since 2012 \u2013 when the company\u2019s revenue grew by 2%.<\/p>\n

Worse still, the company\u2019s revenue numbers are well below the Q3 estimates for this quarter, where analysts\u2019 consensus was $1.36 billion.<\/p>\n\n\n\n
Editor\u2019s Note:\u00a0<\/strong>There\u2019s no question that revenue, earnings, and guidance can have a huge impact on a company\u2019s stock. By beating analyst estimates for all three, a company is virtually assured to blast higher. Founder Robert Williams discusses this idea in detail over at the Wall Street Daily <\/em>Training Center. To gain access,\u00a0simply go to this page now<\/a>.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Net income for the quarter was $196.2 million, or $1.51 per diluted share.<\/p>\n

But for TIF shareholders, the most concerning item to be gleaned from the company\u2019s financial reports is management\u2019s outlook for the rest of 2015.<\/p>\n

Lower Guidance Doesn\u2019t Bode Well<\/h2>\n

The company expects the strong dollar to continue wreaking havoc on the company\u2019s finances, resulting in a low-single-digit percentage increase for the full year when reported in U.S. dollars.<\/p>\n

TIF now expects corporate profits to fall 30% in the current quarter, while stabilizing in the following quarters, resulting in \u201cminimal growth\u201d for the full-year.<\/p>\n

But the company\u2019s outlook seems too optimistic \u2013 even for Wall Street.<\/p>\n

In anticipation of a prolonged strong dollar, Wall Street lowered the company\u2019s Q1 2015 estimates by 11.5%, while also lowering the fiscal year 2016 results by 9% to $4.47 per share.<\/p>\n

With Tiffany & Company shares sitting near 52-week lows and the stock showing oversold in the weekly charts, what\u2019s an investor to do?<\/p>\n

That\u2019s easy\u2026<\/p>\n

When a stock is trading at 57.9x trailing earnings \u2013 or nearly three times the average price-to-earnings ratio of companies in the S&P 500 \u2013 investors should certainly stay away until the company\u2019s outlook improves.<\/p>\n

Good investing,<\/p>\n

Richard Robinson<\/p>\n

The post Strong Dollar Blamed for Tiffany Revenue Dip<\/a> appeared first on Wall Street Daily<\/a>.<\/p>\n

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By WallStreetDaily.com By Richard Robinson, Ph.D., Equities Analyst Tiffany & Company (TIF) shares dropped nearly 4% on Friday. Shares closed at $82.93, or $3.44 lower than the previous day. The stock is now down more than 22.3% this year. That puts it just above Tiffany\u2019s 52-week low of $82.75. The sudden dip came on the […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-69991","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/69991","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=69991"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/69991\/revisions"}],"predecessor-version":[{"id":69999,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/69991\/revisions\/69999"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=69991"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=69991"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=69991"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}