Tiffany & Co. reports earnings for the fiscal third quarter on Friday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Jewelry retailer Tiffany is facing higher commodity costs as precious-metal prices surge.
The New York-based company in October sold its flagship London store after completing a refurbishment and leased it back.
Tiffany also said it will roll out up to 70 smaller-format stores called Tiffany & Co. Collections at a rate of about three to five a year. The stores offer a range of jewelry, including higher-margin silver jewelry, but not engagement jewelry.
BY THE NUMBERS: Analysts polled by Thomson Financial expect net income of 25 cents per share on revenue of $616.2 million.
ANALYST TAKE: Stifel Nicolaus & Co. analyst David Schick said in a note to investors Wednesday that Tiffany will likely benefit from the weaker dollar. He expects strong sales in the U.S. from new products, foreign tourism and strength in high-end jewelry priced over $25,000.
Tiffany's weak spot continues to be Japan, he said.
"Japan remains under pressure from a weak consumer and crowded luxury market," he wrote. "Tiffany continues to introduce new products, update real estate and enhance marketing in an effort to drive sales."
He rates Tiffany at "Buy."
Buckingham Research Group Barbara Wyckoff, who rates Tiffany "Accumulate," wrote in a note Tuesday that she expects same-store sales, or sales in stores open at least one year, a key metric of a retailer's health, to rise 8 percent to 11 percent during the quarter.
"Our sense is that Tiffany's sales continue to hold up along with the rest of the luxury sector," she wrote.
WHATS AHEAD: Tiffany expects 14 percent sales growth for the year.
STOCK PERFORMANCE: Shares rose 31 percent during the first three quarters of the fiscal year beginning Feb. 1 and rose 5 percent during the third quarter alone.
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