Tiffany's Earnings Bomb Wrapped In a Pretty Blue Box | $TIF

Takeaway: "When you call yourself a luxury brand, but your reputation on the Street starts to converge with Kohl’s, you know there’s a problem."

Tiffany's Earnings Bomb Wrapped In a Pretty Blue Box | $TIF - tiffany box

 

Shares of luxury retailer Tiffany (TIF) lost some of their luster today as the company slashed its outlook and reported that results had deteriorated on virtually every line of their P&L. Shares are down 1.6% today.

 

To be clear, Retail analyst Brian McGough has been ahead of the crowd. Since TIF was added to the short side of Investing Ideas, the stock is down -22% while the S&P 500 is up 5.2%.

 

Tiffany's Earnings Bomb Wrapped In a Pretty Blue Box | $TIF - tif v s p

 

Ahead of TIF's results today, here's what our Retail team wrote in a weekend update to Investing Ideas subscribers:

 

"Tiffany (TIF) reports 1Q earnings on Wednesday, May 25th. Looking at recent data points, it seems that this event is more likely to be negative than positive. 

 

  • Last week Macy's reported declining 2 year comp trends. Over the last year, comps for TIF Americas have moved relatively in line with Macy's, and both companies have discussed the negative impact of reduced foreign tourist traffic.
  • Ralph Lauren Corp also noted that sales to foreign tourists were down 25% in the quarter, even working against easier compares from tourism weakness in the quarter last year.
  • TIF CFO Ralph Nicoletti notified the company on May 10th that he would leave on May 20th to take a job with a different company. This comes just 1 month after he stood up in front of analysts at their investor day to lay out the companys financial goals. Generally, executives don’t leave when the team is executing and business is accelerating."

Spot On. 

 

An update following the results...

 

Retail analysts Brian McGough and Alexander Richards minced no words this morning in a note to institutional subscribers:

 

"When you call yourself a luxury brand, but your reputation on the Street starts to converge with Kohl’s, you know there’s a problem... What we are sure of, however, is that this stock is still a short barring a massive correction today that erases a third of TIF’s market cap."

 

In other words, stick with the short here.


Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

read more

7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

read more

Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more