Wednesday, May 25

Thursday, May 26

Tiffany & Co. (TIF)

Consumer Discretionary – Specialty Retail | Reports May 25, before the open.

The Estimize consensus is calling for earnings of 69 cents per share on $922.7 million in revenue, a penny higher than Wall Street on the bottom line but $2.5 million below on the top. Earnings per share estimates have dropped 13% in the past 3 months on negative sentiment heading into the Q1 report. Compared to a year earlier, this reflects a 15% decline in EPS with revenue projected to fall 4%.

What to Watch: In the past few years demand for jewelry has substantially declined, led by a strong U.S. dollar, weakness in China and changing spending habits. Consequently, jewelers like Tiffany’s have seen earnings fall for 4 consecutive quarters. The stock hasn’t been too far behind, down 25.6% over the same time frame.

For Tiffany’s, currency headwinds negatively impact both non-U.S. sales and tourist spending in the United States. Early indications are these problems will persist throughout fiscal 2016. In its most recent analyst call, management guided minimal growth on a constant currency basis with earnings ranging from unchanged to a mid-single digit decline.

On the other hand, there are a number of bright spots for Tiffany’s. The company’s efforts to bolster its omnichannel platform and open new stores should bode well. Meanwhile, on a constant currency basis, sales and comparable store sales increased across its international markets: Asia-Pacific, Japan and Europe. Taking currency headwinds into account, this turns negative across the board.

Abercrombie & Fitch (ANF)

Consumer Discretionary – Specialty Retail | Reports May 26, before the open.

The Estimize consensus calls for EPS of -$0.50, in-line with Wall Street. Revenue expectations are slightly more bearish at $703.5 million vs the sell-side’s $707.35 million. However, these numbers have been trending upward since the last quarterly report, with EPS estimates increasing 8% and revenues up 1%. This puts YoY growth expectations at 8% for EPS and 0% for sales. This is a company that has historically beaten on the bottom-line in 71% of reported quarters, yet only 35% of the time on sales.