Tiffany
We see its stock has risen 10% so far this year, from trading around $85 earlier this year to be around $94 currently.
Experts believe one of the first methods used by the ancient people to distinguish social classes was by wearing accessories which made them look different from the rest. This technique was basically rudimentary jewelry. Therefore, jewelry is as old as us, people, creating certain magnetism, or attraction, as Marilyn Monroe once said “Diamonds are a girl’s best friend”. One of the most representative and emblematic brands in this jewelry industry is Tiffany.
«Limiting ourselves then to economics, let’s briefly look at this company. We see its stock has risen 10% so far this year, from trading around $85 earlier this year to be around $94 currently. It should be mentioned, however, that in the second week of January, its price fell 18% (from $105 to $85) in just seven days, due to the revision with low expectations in the consumption of luxury products in China by 2015. The company has been increasing its sales volume steadily since 2010, highlighting the increase in the 2011 and 2012- years of economic crisis- sales, which was 13.9% and 18.1%. The 2015 fiscal year ended last March 20th, in which Tiffany increased its sales by 5.4% over 2014, these being US $4,249 Mn. The EBITDA margin, which has also been increasing since 2008, was 25.5%. The net income was $545 Mn, with a sales margin of 12.8%», said Felipe Lopez-Galvez, Self-Bank analyst.
Nevertheless, there are no hopes of growth for 2016, being the first year since 2010 that slows down its growth rate. The only clear growth is estimated by their turnover, which is expected to increase by 1.3%, until $4,331 Mn. In addition, it is expected that EBITDA will not show growth, maintaining itself with $1,085 Mn, reducing its sales margin by 25.1%. The net benefit is expected to increase by the small amount of 0.7% against the one obtained in 2014, until it reaches $548 Mn. These expectations of decay in its growth are due to the negative impact the strength of the dollar may have over the company’s accounts, and also the low demand of products in China.
By generating revenue, Tiffany’s main market is the United States (47.8% of revenues), followed by Pacific Asia (23.4%), Japan (14.4%) and Europe (11.7%).
Disclosure: The author is not responsible for the views expressed in the article. The text has been written freely expressing ideas, without receiving any compensation. The author has no business relationship with any of the companies whose shares are listed in this article
