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  • Tiffanys (TIF) Stock Projection: Has Sandy Left Revenues Gone With The Wind?

    Burberry lowered the bar for the luxury sector when they announced they would not meet Wall Street's forecasts for the fiscal year. Most luxury brands have traded off or have been affected by the announcement. Tiffany & Co (NYSE:TIF) was no exceptions as shares dipped but since regained their footing. Shares for the year remain slightly negative.

    Bullish sentiment for Tiffany's have mostly come from the argument that "Not all Luxury Companies are the Same", as coined by Helix Investment Management. In recent research they point out that TIF should not be judged by Burberry's blunder. The note cited Burberry management failure in recuperating revenues after getting rid of lower price-point diffusion lines to remain "elite" in the luxury brand market.

    Others have cited a difference in brand perception with Tiffany's holding a sole monopoly on the 'fantasy engagement' that leads to a 'fantasy wedding'. On the contrary, the argument is that when you think of luxury scarves, bags, and coats, one does not necessarily think of Burberry. They might, but they also might think of Coach, Armani, or Michael Kors.

    Bearish sentiment for TIffany's has come in the form of dissipating interest in luxury diamonds from successful millennials, uncertain macro-economic pressure and more near-term Sandy. Some research reports have noted that the New York flagship store accounts for the majority of the company's revenues. With Sandy effectively putting a halt on revenues of that store for up to week, the question to ask this quarter is whether the dramatic slowdown was met with higher than average foot-traffic, or were those unrealized transactions gone with the wind.

    Institutional Insider foot-traffic monitoring of the 727 Fifth Avenue has revealed a slightly higher YoY rate. However, our proprietary sequestration algorithm has revealed that it is not currently trending high enough to recuperate all of the potential lost sales that was realized during the Sandy shutdown of New York. Institutional Insider predicts that Tiffanys Inc (TIF) will miss top-line EPS and Revenue numbers Q3. We believe management will give a inline-solid guidance for the balance of the year but shares will remain cautious. Please consult Institutional Insider metrics for the expected guidance.

    Nov 23 12:45 PM | Link | Comment!
  • Urban Outfitters (URBN) Shares Will Be Volatile After The Call

    Shares of the urban outfitter reached 52 weeks highs year to date and then traded off as market-wide volatility hit the tape in the recent weeks.

    Overall the street has been bullish on the URBN story, expecting it to report earnings up 24.2% year over year.

    The larger majority of analysts still rate the retailer as a buy but volatility may loom as the effects of Sandy have not been fully realized yet.

    Foot traffic is up slightly year over but average purchase order remains unseen. Due to low volume of research reported on this name and rare management appearances, volatility will be moderate to high as shares will likely gap up or down between 1 to 10% depending on magnitude of the miss / beat.

    Institutional Insider earnings predictions polls with the top 20 actively managed funds have pegged this stock as a buy in our database. We note that the majority of the PMs of these funds are mostly committed to the story to at least through the first half of Q4 as they closely monitor holiday sales.

    Although either earnings or revenue could be a disappointment, we expect management to guide positively, which could prop the share price up.

    Scheduled to report Q3 earnings on 19-Nov after the close.

      • FactSet:
        • Revenue $693.1M
        • EPS $0.41
      • Institutional Insider (17-19 estimates):
        • Q3
          • Comps +4.7%
          • Gross margin 37.8%
          • SG&A 24.2%
          • Operating margin 13.6%
        • Q4
          • Comps +3.7%
          • Gross margin 36.6%
          • SG&A 22.3%
          • Operating margin 14.4%
    Nov 19 2:08 PM | Link | Comment!
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