Tiffany & Co. (NYSE: TIF) closed the day slightly in the red ahead of its first quarter earnings release tomorrow before the market opens.Going into its earnings release, Tiffany is expected to report 20 cents per share earnings, on $533.03 million in revenues. The last time the company reported earnings was back in March when it easily beat out analyst estimates for its fourth quarter. The stock has been moving strongly higher ever since.
The company acknowledges that the economy is going through tough times, and its sales have been suffering as a result. During the current recession people have been cutting back a lot on their spending, and luxury items like those typically found in a Tiffany store have been seeing substantial drop in sales.
While trying to do everything it can to keep its business strong, one thing that Tiffany refuses to do is cut back on its prices. The company believes that it must protect its brand name first and foremost, and in its view, that means leaving prices alone. Many of the company's competitors have been slashing their prices, but so far Tiffany has been able to avoid doing so.
Over the past couple of months we have been hearing more and more about how the recession is nearing its end, but as recently as March, Tiffany & Co. CEO Michael J. Kowalski stated that he has yet to see any increase in his business. At that point he indicated that worldwide sales were off by about 20% in the quarter. We will see how that number actually ended up.
Despite the recent economic slowdown, Tiffany has a pretty strong track record when it comes to out pacing analyst estimates. The last time that Tiffany did not beat Wall Street estimates was back in August of 2006. Can the company do it once more? We will find out in the morning.
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