Tiffany & Co. (NYSE:TIF), the global manufacturer and retailer of fine jewelry and other luxury products, has just released its fourth-quarter report to cap off fiscal 2013. The stock moved lower in the trading session that followed, so let's take a thorough look at the results to determine if we should buy on this weakness or if we should avoid investing in Tiffany for now.

Source: Tiffany's Facebook

The quarterly results
Tiffany released its fourth-quarter report before the market opened on March 21 and the results came in slightly below analysts' estimates; here's a breakdown and a year-over-year comparison:

Metric Reported Expected
Earnings Per Share $1.47 $1.52
Revenue $1.30 billion $1.31 billion

Source: Benzinga

Source: Tiffany's Pinterest

Tiffany's earnings per share increased 5% and revenue increased 5.1% year-over-year, as global comparable-store sales grew 6%. Sales were strong in all regions on a constant-exchange-rate basis, with growth of 7% in the Americas, 11% in the Asian Pacific, 8% in Japan, 10% in Europe, and 47% in the 'Other' region, which includes the high-growth United Arab Emirates.

Gross profit rose 7.5% to $785.61 million and the gross margin expanded 140 basis points to 60.5%, which showed that Tiffany did not need to offer large promotions during the holidays to draw in customers. Overall, Tiffany had a strong quarter, regardless of whether it met analysts' expectations or not, and I believe the weakness in its stock will only be temporary. 

Source: Tiffany's Instagram

What will fiscal 2014 hold?
In the report, Tiffany also provided its outlook for fiscal 2014 with a call for the following results:

  • Earnings per share in the range of $4.05-$4.15
  • Revenue growth in the high-single-digits
  • Open 13 new stores and close four existing stores
  • Free cash flow of at least $400 million
These projections would result in earnings per share growing 8.6%-11.3% from fiscal 2013, below analysts' consensus estimate which called for growth of 14.7%. Analysts had also projected revenue growth of 7.6%, so Tiffany gave guidance in-line with this estimate. If Tiffany can accomplish what it guided for, and I think it can, it would result in another record-setting year for the company and the growth would support a much higher share price. For these reasons, I would buy Tiffany at current levels. 

How was the quarter in comparison with those of competitors?
Michael Kors (NYSE:CPRI) and Coach (NYSE:TPR), two of Tiffany's largest competitors, have also recently reported their quarterly results. Michael Kors released its third-quarter report for fiscal 2014 on Feb. 4 and Coach released its second-quarter report for fiscal 2014 on Jan. 22; let's see how Tiffany stacked up versus these two luxury giants:

Metric Tiffany Michael Kors Coach
Earnings Per Share $1.47 $1.11 $1.06
EPS Growth 5% 73.4% (13.8%)
Revenue $1.30 billion $1.01 billion $1.42 billion
Revenue Growth 5.1% 59% (5.3%)

Source: Company Earnings Reports

Source: Michael Kors' Instagram

Michael Kors reported an absolute blowout quarter, driven by a strong 27.8% increase in comparable-store sales. The company saw its gross profit rise 61.6% to $619.5 million and its gross margin expanded 100 basis points to 61.2%.

Coach, on the other hand, reported a dismal quarter and it was held back by a 13.6% decrease in North American comparable-store sales. Its gross profit fell 9.4% to $982.7 million and its gross margin took a big hit, declining 300 basis points to 69.2%. It is clear that the promotional retail environment of the holiday season proved no match for Michael Kors and Tiffany, but Coach had a very difficult time.

In summary, Tiffany and Michael Kors represent good investment opportunities today, but avoid Coach until it can get back to showing year-over-year growth. 

The Foolish bottom line
Tiffany's quarterly results and earnings expectations for fiscal 2014 may have missed expectations, but I believe the weakness in its stock presents a buying opportunity. The company appears well-positioned to continue on its path of growth and this would support a rise in its share price. Foolish investors should strongly consider initiating positions on any further weakness and holding on to them for several years.