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.

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