Tiffany & Co. (TIF) shares rose 2.71% on Friday, the best daily gain in two months after reporting fourth quarter earnings. Profit came in at an adjusted $1.45 a share, a strong beat to the $1.37 forecast. The big surprise came with revenue printing at $1.23 billion, much higher than the eyed $1.22 billion. Worldwide comparable sales came in flat. The company also initially guided full-year 2017 EPS to rise mid-single digits year over year. The company also guided full-year capital expenditures at $260 million, the same forecast they had for 2016.
CEO Cumenal noted, “Despite macroeconomic and geopolitical challenges in the past year that we believe will continue in 2017, we strongly believe that Tiffany’s strategies are sound and that we have meaningful growth opportunities. Our management team is focused on accelerating the execution of our strategies to deliver extraordinary products, communications and experiences that will delight our customers around the world. Through strong leadership and this accelerated execution, we believe we are well-positioned to deliver attractive total shareholder return over the long-term.”
Price action on the TIF daily chart shows that after the earnings release, price took out the key $92.74 level. If we see bullish momentum accelerate, initial resistance will come from the $96.33 level. Major resistance will come from the psychological century mark. If we see price stall here, initial support will come from the 50-day SMA, which currently trades at the $83.64 level. Deeper support will come from the psychological $80 level.
The Trade: Buy TIF at $89.75, with a stop loss at $88.75 and a take profit at $92.75. The Risk/Reward Ratio is 1:3