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  • Tiffanys (TIF) Stock Projection: Has Sandy Left Revenues Gone With The Wind? 0 comments
    Nov 23, 2012 12:45 PM | about stocks: TIF

    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.

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