Earnings Preview: Tiffany & Co.

Tiffany & Co (TIF) is expected to report Q3 earnings before market open Wednesday, Nov. 26, with a conference call scheduled for 8:30 am ET.

Guidance

Analysts are looking for a profit of 25c on revenue of $643.8M. The consensus range is 15c-33c for EPS, and revenue of $604.2M-$681.06M, according to First Call.

Analyst Views

In August the company raised its FY08 EPS view to $2.82-$2.92 from $2.80-$2.90 vs. First Call consensus of $2.58. Since then the U.S. economy has worsened and Tiffany's stock price has declined over 56% since posting its Q2 results. Demand for jewelry has decreased due to the overall economic slump. Instead of buying luxury items, consumers are flocking to wholesale clubs and discount apparel chains. In response to the financial crisis, Tiffany is considering curbing future store openings, a move which will reduce costs ahead of what is likely to be a disappointing holiday season.

Barbara Wyckoff, an analyst at Buckingham Research, believes comparable sales at the retailer probably declined more than expected due to a stronger dollar and a rapid slowdown in luxury spending. She believes fairly strong international performance is not enough to offset expected weakness in the U.S. Additionally, she says fewer end-of-the-year bonuses could make the upcoming holiday season difficult for Tiffany.

Cowen analyst Laura Champine expects that Tiffany will forecast its FY09 outlook below expectations due to the weak economy hurting results in Japan, Europe and emerging markets.