Tiffany Is Not a Very Good Company

By Douglas A. McIntyre Updated Jan 30, 1:57PM EST · Published Oct 29, 6:50AM EDT

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Tiffany Is Not a Very Good Company — © Roman Tiraspolsky / Shutterstock.com

Tiffany & Co.’s (NYSE: TIF) stock is up 31% over the past five years, compared to a rise of 50% for the S&P 500. If it were not for an offer to buy the firm from luxury conglomerate LVMH, Tiffany’s share price for the period actually would be flat. Financially, Tiffany is not a very good company.

In the first half of the year, Tiffany’s revenue was $2.1 billion, down 3% year over year. Same-store sales were off 4% for the same period. Net income fell 9% to $261 million. Among other things, Tiffany has poor margins. At the same time, management said demand has slowed and growth could falter further.

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Tiffany announced the bid and its official response. Most experts believe it will turn it down and look for a better sale price.

Tiffany & Co. (NYSE:TIF) today confirmed it has received an unsolicited, non-binding proposal from LVMH Moet Hennessy – Louis Vuitton to acquire Tiffany for $120 per share in cash.

While the parties are not in discussions, Tiffany’s Board of Directors, consistent with its fiduciary responsibilities, is carefully reviewing the proposal, with the assistance of independent financial and legal advisors, to determine the course of action it believes is in the best interests of the Company and its shareholders. Tiffany shareholders need take no action at this time.

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Tiffany is successfully executing on its business plan and remains focused on achieving its goal of becoming The Next Generation Luxury Jeweler.

Investors should take the money and run. Tiffany is running out of steam.
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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.