Why Shares of Tiffany & Co. Plunged 10% Today

By Travis HoiumMarketsFool.com

What happened

Continue Reading Below

Shares of jeweler Tiffany & Co. (NYSE: TIF) dropped as much as 9.7% on Wednesday after reporting earnings that fell short of expectations. At 11:30 p.m. EDT, shares had recovered slightly, but were still down 7% on the day.

So what

Sales rose 1% globally, to $899.6 million, on strength in Asia-Pacific and wholesale diamond sales, but were below analyst estimates of $913.7 million. Net income jumped from $87.5 million a year ago to $92.9 million, or $0.74 per share. That topped Wall Street's estimate of $0.70 per share.

More From Fool.com

Image source: Getty Images.

Investors today focused on a 3% decline in comparable-store sales, which isn't usually a good sign for retail companies. Sales in the Americas were a big part of the problem. Comparable sales were down 4% versus a year ago, which management blamed on a decline in foreign tourism and local spending.

Now what

Tiffany's bottom-line improvement, despite a drop in sales, is a testament to its more focused business and better margins. But long-term investors would like to see more growth, and it appears that the high-end jewelry market just isn't as robust as it was a couple of years ago. With that said, shares still trade at only about 25 times trailing earnings, and this is a company with long-term staying power, so I see this current weakness as a great opportunity for long-term investors to buy into the stock.

10 stocks we like better than Tiffany & Co.When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Tiffany & Co. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of May 1, 2017

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.