The numbers were less than street expected and stock is trading down this AM. Punishing Tiffany for this slight miss is an opportunity for those who don’t own this top luxury brand and core play for any global consumer or luxury brand index.
The "Emerging Money Global Luxury Index" (EMGLI) counts Tiffany as a core member due to the demand for jewelry out of Asia, EMEA.
We have talked at length why luxury goods spending is only going to picking up steam in emerging markets with the demographics shifting so much of the wealth to younger consumers.
The rapidly expanding move in "A" class and "B" class segments means there are more and more buyers as well.
Consensus calls for global Luxury goods sales to grow 10% and EPS to expand 14% in 2014.
China is now the largest percentage of the growth in luxury and is forecasted to be 40% of the entire luxury goods market by 2020.
Tiffany's multiple by historic standards looks stretched relative to itself. At 25X current and 24Xe'14, Tiffany trades in excess of the average 18-19X of the last 5years.
Relative to its peer group $TIF also expensive by about 10% but with the multiple expansions has been margin expansion and higher growth.
Take a look at the new "super-cycle" in emerging markets that is unfolding in the "Luxury" sector.