Expect 8%-11% Earnings Growth From Tiffany: Chen

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Aug. 27 (Bloomberg) -- Citigroup's Oliver Chen and Thor Equities CEO Joseph Sitt discuss Tiffany's second-quarter earnings and the outlook for the luxury retail market. They speak with Carol Massar on Bloomberg Television's "Taking Stock." (Source: Bloomberg)

Celebes -- sotheby's. it is great to have both of you with us.

Lots to talk about.

I thought it would be a quiet day in august.

Let take it up.

Tiffany was lower.

I know it is a downward market.

There are concerns about sales.

They did produce great results abroad.

The story with tiffany is more of a fair valuation.

Rex you downgraded do new?

We did about 10 minutes ago.

It is trading at 22 times.

It is probably going earnings at 8% to 11%. they are becoming more fashionable and fixing projects.

You do not like the stock or valuation.


You invest in a lot of retail property.

Tiffany has its flagship store.

When you hear the result, you think what?

There are two forces working the luxury market.

We represent probably about a hundred around the world.

We get good feedback to the marketplace in general.

What we have been hearing was a little bit slow down as a result of the global economic and political activity that has been going on around the world.

A little slow down and jewelry demand by the chinese.

Giftgiving is being looked at negatively as incident of as a required way to do it.

While the emerging market long- term is very exciting for the luxury market for tourism, etc., short term it is taking a little bit of a positive.

That is one of the things we have been seeing in the marketplace.

We are spending so much time talking about concerns of the emerging markets, whether they are coming undone.

They are lagging developed markets.

What we're hearing, are they on target or not as bad as some of the stories?

It is hit or miss.

There are certain markets like vietnam continuing to form really well on the one extreme.

On the other side you have a market like turkey, booming economy, great marketplace tummy tuck.

They're spinning the total number of billion of dollars to build the largest airports in the world.

All of a sudden you have all of these rallies.

It is a major shopping street . on the other side, the asian side, they have this.

Residents with spent money.

That would cause a pause.

From a graphic perspective it depends on the markets.

It was the greatest story , 180 million old growing like wildfire.

It happens.

Is it more than that?

Likes brazil is more in terms of agricultural strength.

It is still a nerd world -- a third world country.

It does affect luxury spending.

I want to talk about another thing.

We have news that they have almost a 6% stake in the company.

Is this a good thing or bad thing to have this activist investor involved?

It will be a jew magic thing.

There are opportunities for potential changes.

They are going toward a supreme structure.

They on both the new york and london headquarters.

They have sotheby's financial services.

Big will create act -- it will create action and positive change.

I think for himself it is exciting.

He realizes the importance of the emerging market and how they will be played more and more in fields far away.

It used to be you had a key art gallery and you did all your business from there.

It is all over.

Now you have this.

It is a local markets.

If i can add one more thing, one of the income has hurt tiffany lately is the new luxury.

Two of the best-performing cases out there, people like michael corners -- kohrs and michael tummy tuck.

Of the volumes are incredible.

People feel like they are buying the best of the best years of . she has grown tremendously.

There is the middle market business.

But it is also a little trendier to some of the younger shoppers.

They have fabulous offerings.

Desmond has been known.

Did they bring in some younger designers?

There is a new gatsby collection.

They also focused on yellow diamonds.

This is about fashion.

It is about executing temporary price points.

It is about pride riding -- providing luxury.

They are all reinventing fashion.

What happened with the emerging markets is rolexes have gone up from 3k to 7k. we do have super shot -- sticker shock with premium handbags.

You can turn to this great looking jewelry but looks fabulous.

On the one hand, the market is hurting a little bit because more competition.

On the other hand, you have all this emerging market wealth.

In the next seven you will see

This text has been automatically generated. It may not be 100% accurate.


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