Tiffany & Co. Kate Reigle November 3, 2011. About the Company Holding company Product design, manufacturing and retailing activities. Principal subsidiary:
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About the Company Holding company Product design, manufacturing and retailing activities. Principal subsidiary: Tiffany and Company – Jeweler and specialty retailer (91% of net sales in fiscal 2010) – Timepieces, sterling silverware, china, crystal, stationery, fragrances and accessories. Founded in 1837 in downtown Manhattan. 230 TIFFANY & CO. stores and boutiques around the world.
Key Growth Strategies Selectively expand its channels of distribution in important markets around the world without compromising the long- term value of the TIFFANY & CO. trademark Increase sales in existing stores by developing new products Increase its control over product supply and achieve improved profit margins through direct diamond sourcing and internal jewelry manufacturing Enhance customer awareness through marketing and public relations programs Provide customer service that ensures a superior shopping experience.
Strengths 99 Composite Rating is the best among the 12 stocks Retail/Wholesale-Jewelry Group Established brand name and reputation Continuously expanding
Weaknesses Knock-offs are becoming more prevalent throughout the recession Less disposable income
Opportunities ¾ Biggest competitors are all privately held – Harry Winston Inc. – Moët Hennessy Louis Vuitton – Compagnie Financière Richemont Cartier jewelry, Piaget and Baume & Mercier watches, Alfred Dunhill leather goods, and Montblanc pens – Signet Jewelers is Public Expanding into Eastern Europe – Prague, luxury strip – Global net sales have grown by 25% last quarter
Threats Another recession/depression Competitors going public Failure overseas due to downfall of European economy
Financial News Sales growth has accelerated, hitting 30% last quarter. Earnings growth also picked up at 56% last quarter. Tiffany is scheduled to release its latest quarterly report Nov. 29. Analysts see earnings climbing 27% in fiscal 2012, which ends in Jan. – Predict a gain of just 13% in fiscal 2013. Dividends were increased 16% in May 2011
Checklist Meets 6/10 criteria Does not meet a criteria under Efficiency Ratios
Recommendation Morningstar – Fair Value: $50.00 – Consider Buy: $35.00 – Consider Sell: $67.50 Reuters – Buy :8 – Hold: 9 – Sell: 1 Buy… but not right now. Set a price point ~ $70.00 Amount of shares is up for discussion depending on other presentations