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What to look for in Tiffany’s profit report

What to look for in Tiffany’s profit report By Sital S. Patel Published: Aug 25, 2014 4:42 p.m. ET

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tiffany and co Luxury jewelry retailer is expected to report strong sales

tiffany and co outlet By

SitalS. Patel Reporter Bloomberg

tiffany and co NEW YORK (MarketWatch) – Tiffany & Co. is scheduled to report second-quarter results before the bell on Wednesday. Analysts are projecting the luxury jewelry retailer to continue to show strength in sales and higher profit than a year ago. The company has beaten estimates for sales in four of the last five quarters.

tiffany and co Here’s what investors can expect:

tiffany and co Earnings: Tiffany TIF, -0.31%   is expected to report profit of 85 cents a share for the quarter ending July, according to the consensus of analysts surveyed by FactSet, up from 83 cents a share in the year-ago period. In March, the company said it expected full-year fiscal 2014 earnings of $4.15 to $4.25 a share.

tiffany and co Revenue: Sales are expected to rise to $987.5 million, according to FactSet, from $926 million in the year-ago quarter. The company said in March that full-fiscal 2014 same-store sales, or sales of stores open at least a year, expected to increase 6.1%.

Stock Reaction: Shares are up 9.3% in the year to date, compared with an 8% gain for the S&P 500 SPX, +0.48%   and a 0.1% increase in the SPDR S&P Retail exchange-traded fund. The shares are about 2% below their all-time closing high of $103.38 reached on July 3, 2014.

What to watch for: Analysts are bullish on the stock and expect higher sales this quarter to push shares higher. In the face of a broader slump in retail sales, the jewelry giant has done well, reporting a strong performance earlier in the year, after a 6% increase in sales last holiday season that came as many of its competitors struggled. Key to Tiffany’s strategy is the fashion jewelry category, which generates higher-than-average sales and profits, say analysts.

Analysts are expecting the company’s fall and winter sales to benefit from new collection debuts, under its new design director Francesca Amfitheatrof.

Amfitheatrof, the house’s first female design director, has created jewelry for a number of upscale labels, including Fendi, Chanel and Marni.

Analysts view Tifffany as one of very few pure-play, U.S. high-end luxury brands. Watch for growth in worldwide sales, particularly in Japan, where same-store sales surged 30% in the last quarter.

The company has undergone a number of management changes in the last several months, including the announcement in July that chairman and CEO Michael J. Kowalski will retire in March next year. Kowalski will be succeeded by Frederic Cumenal, who is currently the company’s president. Other recent appointments include Ralph Nicoletti as CFO, to replace Jim Fernandez who retired at the end of July. Analysts are expecting the transition to be seamless.

Stock References TIF -0.31 -0.31% SPX +9.52 +0.48% More News from MarketWatch Top Stories Trending Recommended The S&P 500 topped 2,000. Should you care? S&P 500 jumps to record close just below 2,000 Kite Pharma shares fly high on study results Warren Buffett to help finance Burger King-Tim Hortons deal Can Best Buy keep the momentum going? MarketWatch Partner Center Sital S. Patel Sital Patel covers Wall Street and the financial services industry from New York. You can follow her on Twitter at @Sital.

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