Tiffany & Co beats by $0.09, beats on revs; reaffirms outlook
- Reports Q3 (Oct) GAAP earnings of $0.76 per share, $0.09 better than the Capital IQ Consensus of $0.67; revenues rose 1.2% year/year to $949 mln vs the $922.52 mln Capital IQ Consensus.
- Comparable store sales declined 2%.
- Gross margins of 61.0% in the third quarter and 61.4% in the year-to-date were higher than 60.2% and 59.7%, respectively, in the prior year. The increases were due to lower product input costs, changes in product sales mix and price increases taken in the past year, partly offset by the impact of increased wholesale sales of diamonds.
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Outlook:
- For the full 2016 fiscal year, management is maintaining its outlook to expect: (i) worldwide net sales declining by a low single-digit percentage from the prior year and (ii) earnings per diluted share declining by a mid-single-digit percentage from 2015's adjusted earnings. These expectations are approximations and are based on the Company's plans and assumptions, including: (i) worldwide gross retail square footage increasing 3%, net through 11 store openings, 6 relocations and 6 closings; (ii) operating margin below the prior year due to an anticipated increase in gross margin more than offset by SG&A expense growth; (iii) interest and other expenses, net unchanged from 2015; (iv) an effective income tax rate lower than the prior year; (v) the U.S. dollar unchanged at current spot rates versus other foreign currencies for the balance of the year; and (vi) weighted average diluted shares outstanding lower than in fiscal 2015.
- Management also expects for the full 2016 fiscal year: (i) net cash provided by operating activities of at least $660 mln and (ii) free cash flow of at least $400 mln. These expectations are approximations and are based on the Company's plans and assumptions, including: (i) net inventories unchanged from the prior year, (ii) capital expenditures of $250 mln and (iii) net earnings in line with management's expectations.