When Chasing The Tape—Please Mind The Lemmings

Prior to today’s open MarketWatch provided a reminder that the lemmings are still rampaging in the casino. With respect to Tiffany’s (TIF) pre-market earnings announcement, it telegraphed the reason why TIF soared by 12% or about $1.5 billion during the course of the trading day:

Tiffany & Co.’s stock climbed 3.5% in premarket trade Wednesday, after the luxury jewelry retailer reported better-than-expected fiscal first-quarter profit and sales, and provided an upbeat earnings outlook for the year.

Well, not exactly. Worldwide sales fell by 5% from $1.01 billion in the April quarter last year to $962 million during the current the quarter. Same store sales dropped even more—by 7%.

Likewise, net income of $105 million represented a 17% plunge from last year’s $126 million. Not surprisingly, however, this was greeted as rip-roaring good news because the street “consensus” had marked down expected earnings to just $91 million or by 27% from last year QI level.

As for the “upbeat”  earnings guidance, it amounted to this:

For the full fiscal year, Tiffany said it expects “minimal growth” in earnings per share from the $4.20 earned in fiscal 2014….

Apparently, flat is the new “upbeat”, but even then TIF didn’t actually earn $4.20 in the year ending in January. That’s the ex-items fiction that they use in the casino. TIF actually earned $3.73 per share last year.

So at today’s close of $94.50 the company was actually trading at 25X a net income number that management itself attested will be dead in the water this year; and which is at serious risk of shortfall because TIF is starting 2015 deep in the hole based on these crummy Q1 results.

Actually, upon today’s announcement Tiffany’s LTM net income computes out to $463 million. That happens to be the exact same number as the $464 million it posted for the LTM period ending way back in September 2013.

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Carol W 5 years ago Contributor's comment

Mea Culpa. It was not my intention to offend. Cheers, Carol

Terrence Howard 5 years ago Member's comment

Very nice of you. By the way, I really enjoyed your last couple of articles.

Carol W 5 years ago Contributor's comment

Hi David

With all due respect there's something unnerving about talking like you're always the smartest guy in the room.

A little humility from you might help make you a better read. It's one thing to have an opinion..quite another to have this AGENDA of what's wrong with the world. Your "Johnny-one -note- itis" can get pretty tiring to listen to.

Tell us what you like!

Cheers Carol

ps. Hey send me a little blue box -I won't say no!


Kurt Benson 5 years ago Member's comment

I reported abuse on your comment. One thing I love about this site is the comments tend to be much more respectful and civil than on other sites where they tend to devolve into insults and anarchy. I would hate to see that happen here!

And I noticed that you are a contributor too! Shocked that you would attack a fellow contributor like that. Mature individuals know how agree to disagree and/or have a respectful discourse on their differences without resorting to derision!

Terrence Howard 5 years ago Member's comment

Nicely said!

Angry Old Lady 5 years ago Member's comment

Wow, how rude! My mother always told me if you don't have something nice to say about someone.... keep it to yourself. This isn't stocktwits or Yahoo Finance, insulting others is not a good way to pick up new followers or friends.

Jared Green 5 years ago Member's comment

Ouch, give the guy some credit - he often is the smartest guy in the room. And even when not, there's a nicer way to say it.