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Tiffany (TIF) Hits 52-Week High: What's Driving the Stock?

Zacks Equity Research

Shares of Tiffany & Co. TIF hit a 52-week high of $95.00 yesterday before closing a tad lower at $94.01. In fact, shares of this jewelry retailer have jumped 4.5% since it came out with its fourth-quarter fiscal 2016 results.

Tiffany posted the third straight quarter of positive earnings surprise, when it reported fourth-quarter results. Moreover, its net sales improved and also came ahead of the Zacks Consensus Estimate.

Moving ahead, Tiffany anticipates fiscal 2017 adjusted earnings per share to increase by a mid-single-digit-percentage from fiscal 2016 earnings of $3.75. Also, the company envisions fiscal 2017 net sales to increase by a low-single-digit percentage and by a mid-single-digit percentage on a constant-exchange-rate basis. (Read more: Tiffany Beats on Q4 Earnings & Sales; Guides FY17)

Tiffany & Co. Price and Consensus

Tiffany & Co. Price and Consensus | Tiffany & Co. Quote

Consequently, the Zacks Consensus Estimate for fiscal 2017 increased 2 cents to $3.90 over the past seven days, whereas the same remained unchanged at 71 cents for first-quarter fiscal 2017.

Tiffany holds a significant position in the world jewelry market due to its distinctive brand appeal. Moreover, it is well positioned to augment both its top- and bottom-line performance in the long run by leveraging capital investments made over the past several years in distribution, manufacturing and diamond sourcing processes.

In fact, the company is also looking at other revenue generating avenues, which includes expansion of its watch business. Additionally, it is focusing on enhancing its omni-channel platform and opening smaller stores that offer selected collections of lower priced higher-margin product.  This, in turn, is expected to boost store's productivity.

All these initiatives have helped the stock to outperform both the Zacks categorized Retail – Jewelry Stores industry and the broader sector in the past one year. This Zacks Rank #3 (Hold) company surged 30.6%, against the industry’s decline of 7.9%. Also, the Zacks categorized Retail-Wholesale sector witnessed a return of 9.2% over the same time frame.



Hurdles to Overcome

Nonetheless, the stock is not devoid of challenges. Going ahead, a mature domestic market, foreign currency headwinds and cautious consumer spending remain causes of concern. Additionally, Tiffany’s performance in the Americas and Europe unveils a dismal picture, as sales at these regions have been declining persistently. In fact, sluggish consumer spending and reduced sales at the Fifth Avenue Flagship Store on account of its proximity to the Trump Tower hurt sales in the Americas in the fiscal fourth quarter. Further, sales in the New York Flagship fell 7%, in the said quarter.

Stocks that Warrant a Look

Better-ranked stocks in the broader Retail-Wholesale space include The Children's Place, Inc. PLCE, Kate Spade & Company KATE and Foot Locker, Inc. FL.

The Children's Place, with a long-term earnings growth rate of 10.3%, has surged nearly 43% in the past six months. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kate Spade & Company, a Zacks Rank #1 stock, has jumped 62.6% in the past three months. Moreover, it has an impressive long-term earnings growth rate of 28.3%.

Foot Locker, which carries a Zacks Rank #2 (Buy), has increased 15.1% in the past one year. Further, it has a long-term earnings growth rate of 9.7%.

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Foot Locker, Inc. (FL): Free Stock Analysis Report
 
Children's Place, Inc. (The) (PLCE): Free Stock Analysis Report
 
Tiffany & Co. (TIF): Free Stock Analysis Report
 
Kate Spade & Company (KATE): Free Stock Analysis Report
 
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