A Sparkling Quarter But Lackluster Outlook Could Tarnish Tiffany & Co. (TIF)

Shares currently trade at a modest P/E of 15.74, and yield an attractive 2.32%. Plus, Coach has caught the eye of some of the best-performing hedge funds.

Logging an impressive fiscal Q4, Michael Kors Holdings Ltd (NYSE:KORS) continues to outperform. The Hong Kong-based handbag and accessory designer recently reported net income of $101.1 billion, or $0.50 a share. That was up from a year earlier profit of $43.6 million, or $0.22. And, results handily beat EPS estimates of $0.39

The company continues to gain market share (up 63%) throughout Europe, despite the region’s economic doldrums. Same-store sales in North America increased 35% amid growing demand for its luxury brand.

That kind of momentum might be difficult to keep up. For the full year, Michael Kors sees sales of $2.65-$2.75 billion, with same store sales up 15%-20%. EPS are anticipated to come in at $2.43-$2.47. Those figures are pretty much in line with the consensus EPS of $2.45 on stronger sales of $2.82 billion.

Shares, trading slightly below a 52-week high of $66.18, look pricey at a P/E of 37.

Tiffany is tempting, but proceed with caution

Tiffany & Co. (NYSE:TIF)’s muted full-year guidance has some market participants shopping elsewhere. While the company may be overly cautious in its guidance, the tepid outlook is a concern.

For the current quarter, Tiffany projects flat earnings on a single-digit sales increase. Analysts are a tad more upbeat with a 9% per share growth on a 7% sales increase.

Deutsche Bank and Jefferies Group rate Tiffany shares a “hold.” J.P. Morgan and Atlantic Securities maintain a “neutral” rating on the stock.

With a beta (a measure of volatility) of 1.80, shares tend to gyrate.

Until Tiffany polishes its outlook, savvy shoppers might do better spending in its stores than investing in its stock.

Diane Alter has no position in any stocks mentioned. The Motley Fool recommends Coach. The Motley Fool owns shares of Coach. Diane is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article A Sparkling Quarter But Lackluster Outlook Could Tarnish Tiffany originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.