Tiffany & Co. 2Q EPS Preview

Tiffany & Company TIF is expected to report strong 2Q results due to strong gross margins and solid top line performance, according to Goldman Sachs. Though sales have decelerated since Mother's Day, a +270bps margin gain is expected and diamond prices have been up 17% y/y, while merchandise sourced 9-12 months ago (at substantially lower prices) has been sold mostly in the 2Q. Goldman writes that guidance is not expected to be bold, even though guidance raises are necessary to support any meaningful rise in stock, and a strong 2Q will support the stock even though a lack of guidance will likely restrain any positive reactions. Goldman maintains its Neutral rating and $41 price target. Tiffany & Company closed yesterday at $43.30.