Tiffany?s Q2 Profit Falls 30%,Still Beats View, Outlook Raised

[Mikeyy]

Jewelry maker Tiffany & Co. (TIF) said late Thursday that its second quarter profit plunged 30% from last year, but still beat expectations, and it raised its full-year forecast.
The New York-based company reported second quarter net income of $56.8 million, or 46 cents per share, compared with $80.8 million, or 63 cents per share, in the year-ago period. Excluding one-time gains, adjusted profit was 39 cents per share.


http://www.dividend.com/blog/?p=13023

 

[MSchechter]

While I am sure a lot of this is the economy, I wonder how (and if at all) the closing of Iridesse plays into that...

Hard to see numbers like that, but at least there is a bit of optimism on the full-year forecast.

 

[knotty panda]

If at all? The plunge would have been much greater had they not practically given away the Iridesse inventory to create cash flow. There's always going to be a small, select Tiffany consumer base which keeps the stores solvent. The less frequent purchaser is the gravy train. The gravy train numbers have been dwindling for some time. They saw this coming from far off.

It's the deeply discounted prices of the Iridesse inventory that actually rallied the 30% plunge. Had they not closed Iridesse, the plunge would have been much greater. They can now renegotiate the existing leases from both franchises back to just the named stores, extending the lease term (which automatically defers the cash outlay) which also gives them bargaining power in getting better lease rates.

Landlord gets longer leases with anchor store Tiffany, Tiffany gets cheaper lease rates. Everyone's happy.

Pretty smart.

 

[MSchechter]

Gotta love it... Even when a company like that loses, they win!