Retail earnings season is in full swing and 3 big retailers are reporting earnings tomorrow: Movado, Tiffany and DSW.  I’m bullish on all 3.  In full disclosure I bought all 3 ahead of their earnings announcements last quarter and profited from each.  I’m aiming for a repeat tomorrow.


Movado is a jewelry retailer, mostly known for watches.  You may be noticing a theme on the blog but I really believe the retail growth stories are in luxury right now.  This isn’t just representative of the US, but especially due to growing taste for luxury goods and spending in China.  Movado is also benefiting from its branding relationships with other retailers such as Tommy Hilfiger.  According to analyst polls Movado’s earnings are expected to post a 30% gain over last year to 87 cents a share and revenue is expected to increase 15% to $184 million.  Last quarter Movado beat earnings and shares were up over 10% in they day earnings were announced.  Since then shares have jumped another $5, up to $47 today.


Tifanny is another high end jeweler benefiting from sales in Europe and Asia.  It’s also benefiting from a new design director who is expected to focus on more “high-fashion” jewelry.  Another promising note is that the company showed that it was able to implement price increases last quarter and establish wider gross margins.  Analysts expect earnings to be 15 percent higher than a year ago, to $0.58 per share and revenues for the quarter are predicted to have risen more than four percent year-over-year to $889.51 million. 


DSW is a shoe retailer that stocks both high and low end discounted shoes and bags.  Analysts estimate revenue of $658 million, at a 9% growth from last year, and earnings per share of $0.48, up 14% from last year. DSW has beat estimates in four of the past five quarters and misses were narrow.  Plus, retailers that sell similar footwear, such as Macy’s, had strong earnings announcements this quarter.

One important note for DSW is that they implemented a stock split since the last earnings announcement (each share of stock becomes 2 shares, and the price of each share is halved).  The company will report third-quarter results and its comparable results from last year on a split-adjusted basis.


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