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Tiffany & Co. Message Board

  • kia_hamadani kia_hamadani Dec 20, 2010 2:04 PM Flag

    profit margin squeeze is coming in Q4

    Tiffany will not be able to pass on the higher commodities prices to their consumers and this will significantly eat into margins in coming quarters. Silver and gold is becoming a currency, jewelers like Tiffany will never be able to sell their products with historical profit margins in this economy. TIF will fall back to under $30 within a few years

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    • Okay, let me get this straight - the bulls see nothing but more upside after the recent HUGE run up over the past 60 days. Am I right? IMO the recent shopping spree those that have have gone on is priced in. So it comes down to the earnings report - which will be a blow out - but more importantly guidance on the conference call. What is going to be said that there is even more growth for 2011 with a hit to margins? That is the key. The rest of you focused solely on the fact that people will keep buying ignore this and are just jokers. If the costs keep rising - TIF is ever expanding (a good thing) but costly and the price of metals cannot be ignored - including energy too.

      So good luck to you perma Bulls. IMO the smart investor will call the bubble, sell and re-enter to go long when ALL RETAIL PULLS BACK in JANUARY. Check out retail - almost straight up since Sept. Must pull back in January. My price point to re enter TIF is in the low 50s.


      • 1 Reply to ajmanieri
      • I would raise your entry price and, do believe it is an excellent stock to enter. Several growth engines with very good potential to help on the margin front. If you get mid to high fifty's I think you'll be very lucky. If you want to talk bubbles, gold has to be topping or at least slowing, in my opinion so that issue should abate. Also, they have managed this in the past, nothing really earth shattering, lots of flexibility with product options, design, smart management, resilient customer type, etc. etc,. I sold my trading position and plan to never sell my core position. Will look to add another trading position in the near future.

        Don't forget with an improving economy, we will get stock MULTIPLE EXPANSION, especially for a premium and classic brand like TIF. Plus, I believe you will have more, and NEW money chasing stocks in 2011, that should add to the multiple expansion.

    • Pretty hilarious. The reason TIF and Coach have been doing so well this year is exactly because people that buy their products, don't really care what they cost.
      A year ago, despite doing well, the company went through a major round of layoffs, reducing operating costs. The fruit of that is superior performance to continue.
      My target: $93 sometime in 2011.

    • nike just released results that show EXACTLY what I predicted:

      "Nike executives also repeated comments made in the previous quarter that rising cotton, labor and transportation costs would hurt profit margins in the second half of the fiscal year despite rising demand."

      tif will be lucky to stay above $60 this week, $50 by end of January once the profit margin squeeze becomes common knowledge

    • You should get help with financial matters, and a high school english class wouldn't hurt.

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