Tiffany & Co. Earnings: Margins Shrink Again, Net Income Falls

S&P 500 (NYSE:SPY) component Tiffany & Co. (NYSE:TIF) reported its results for the third quarter. Tiffany & Co. is a jeweler and specialty retailer that sells timepieces, sterling silverware, china, crystal, stationery, fragrances and accessories.

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Tiffany & Co. Earnings Cheat Sheet

Results: Net income for Tiffany & Co. fell to $63.2 million (49 cents per share) vs. $89.7 million (70 cents per share) a year earlier. This is a decline of 29.6% from the year-earlier quarter.

Revenue: Rose 3.8% to $852.7 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Tiffany & Co. fell short of the mean analyst estimate of 63 cents per share.

Key Stats:

Last quarter was the fifth in a row that the company saw shrinking gross margins, as they fell 3.5 percentage points from the year-earlier quarter to 54.4%. Over that time, margins have contracted on average 1.7 percentage points per quarter on a year-over-year basis.

The company has missed analyst estiamtes for four quarters in a row. It fell short by 2 cents in the second quarter, by 5 cents in the first quarter, and by 3 cents in the fourth quarter of the last fiscal year.

Revenue has increased for four quarters in a row. Revenue increased 1.6% to $886.6 million in the second quarter. The figure rose 7.6% in the first quarter from the year earlier and climbed 7.8% in the fourth quarter of the last fiscal year from the year-ago quarter.

Last quarter’s profit decrease ends a two-quarter streak of year-over-year profit increases. Net income rose 2% in the second quarter and 0.6% in the first quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the fourth quarter has moved up from $1.60 a share to $1.61 over the last sixty days. The average estimate for the fiscal year has remained at $3.59 per share.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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