THE TIF­FANY BLUES

Short-sell­ers bet­ting jeweller’s shares will drop as it pre­pares to de­liver hol­i­day sales re­sults,

Toronto Star - - STAR BUSINESS JOURNAL - JANET FRE­UND AND GRE­GORY CALDERONE

Et Tu, Tif­fany & Co.?

That’s the ques­tion that ap­pears to be on in­vestors’ minds as the up­scale re­tailer gets ready to up­date Wall Street on its hol­i­day sales. Short sell­ers have been in­creas­ing their bets that shares will de­cline. In the op­tions mar­ket, the to­tal num- ber of put con­tracts ex­ceeds calls by a ra­tio of 1.4-to-1, and in­vestors are po­si­tioned for an out­size move in the wake of the re­port.

Tif­fany, known for its fine jew­elry, is set to un­veil its sales re­sults for the Novem­ber-De­cem­ber hol­i­day pe­riod on Jan. 18. The re­port comes as U.S. re­tail stocks have al­ready fallen un­der pres­sure after re­sults from Macy’s, Kohl’s, Barnes & No­ble and oth­ers showed the sea­son wasn’t as strong as some had ex­pected.

As of Dec. 31, 8.4 mil­lion shares in Tif­fany, or 7.3 per cent of the to­tal avail­able for trad­ing, were sold short. That has since risen to around 10 mil­lion shares, or 8.3 per cent of the float, ac­cord­ing to data com­piled by IHS Markit.

The in­crease in bear­ish sen­ti­ment has “likely co­in­cided with a de­cline in hedge-fund long po­si­tion­ing,” Markit an­a­lyst Sa­muel Pier­son said by email.

Tif­fany’s shares are trad­ing around 40 per cent below their record high reached six months ago. The de­cline was driven in part by con­cern that lux­ury re­tail­ers are go­ing to be par­tic­u­larly hard hit by China’s eco- nomic slow­down. Tif­fany gets about 40 per cent of rev­enue from the Asia Pa­cific re­gion, in­clud­ing China and Ja­pan.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.