Signet Jewelers plans to announce its Q3 of fiscal 2020 earnings before the markets open on December 5. We expect its revenues and earnings to be subdued.
Signet stock closed about 27% higher. The company’s second-quarter results beat analysts’ forecast. Investors should use the recovery in the stock to exit.
Of the 28 analysts providing recommendations on Tiffany (TIF) stock, 16 analysts maintain a “buy” rating, 11 analysts suggest a “hold,” and one analyst has a “sell” rating.
Signet Jewelers (SIG) stock fell 30.4% on November 21, reporting a loss of $0.10 per share in fiscal 3Q18. Analysts expected SIG to post a profit of $0.10 per share.
Analysts have a consensus rating of 2.4 for Tiffany stock. Of the 26 analysts covering TIF, 46.0% recommend a “buy,” and 54.0% maintain a “hold” as of August 18, 2017.
Tiffany (TIF) will report its fiscal 2Q17 earnings on August 24, 2017. The stock has risen 13.7% YTD as of August 18 and has outperformed Signet Jewelers (SIG) and the S&P 500.
Lower sales and increased competition are pressuring jewelry retailers’ profitability, while adverse currency movements are putting dents in company margins.
Tiffany’s (TIF) fiscal 1Q17 sales of $0.9 billion fell short of Wall Street’s consensus estimate but rose ~1% driven by growth in fashion jewelry and increased sales in mainland China (FXI).
Tiffany is trading at a higher multiple than its peers Signet and Fossil and at a higher valuation relative to SPY and the Dow Jones Industrial Average.
Tiffany & Co. is a holding company that operates through its subsidiary companies. The most notable is Tiffany & Company, a jeweler and specialty retailer.
Since 2006, Tiffany’s margins have been on the higher side compared to its peers, including Signet Jewelers and Fossil, in the retail jewelry industry.
Tiffany’s key strategic objectives for growth include expanding marketing communications, opening stores in key markets, and enhancing in-store experience.
In April 2015, Tiffany launched its vintage-inspired CT60 watch collection, considering the growth opportunities in the global luxury timepiece market.
Tiffany’s capital expenditure was 5.8% of its sales in fiscal 2015. Signet Jewelers, Fossil, and Pandora had capex-to-sales ratios of 3.8%, 2.7%, and 2.4%.
At the end of fiscal 2015, Tiffany had a total inventory of $2.4 billion and inventory turnover of 0.73x, implying potential low sales and excess inventory.
Porter’s Five Forces model suggests that there are five forces that determine the attractiveness and long-term profitability of an industry or a sector.
Since it’s a luxury brand, Tiffany & Co.’s products are priced high, with no promotions. Thus, Tiffany products may be out of reach for many customers.
Signet acknowledges the value of e-commerce growth and its ability to maximize in-store experiences. Signet has thus integrated its website with its stores.
Signet Jewelers operates through 100% owned subsidiaries with a presence in the US, the UK, and Canada. It has ~3,600 stores under various name brands.
Total retail jewelry sales in the US grew at a CAGR of 4.4%, reaching $74.7 billion in 2014. Fine jewelry sales grew at a CAGR of 5%, reaching ~$69 billion.
Signet aims to advance its vertical integration, including the sourcing and manufacturing of rough diamonds, which should help improve its supply chain.
