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Can Tiffany still sparkle as China trade war heats up?

10/06/2019 · Tiffany & Co. (TIF) 

Investment Ideas Retail US

Tiffany storefront Covent Garden

Chinese headwinds have put pressure on the jeweller's share price this year and left the stock trading at a slight discount to the wider US market. Is this a buying opportunity for long-term fans, or is now the time to stay on the sidelines? We've been taking a closer look at this story.


Timing matters in investment. Shareholders in upmarket US jeweller Tiffany & Co (US: TIF) who purchased their stock three years ago should be sitting on a 46% profit. But those who bought one year ago - when the stock was buoyed by strong trading - may not be so happy. Their shares have since fallen by about 30%.

Of course, true long-term investors might shrug off both pieces of news and remind us that the shares have risen by about 320% over the last 20 years. The S&P 500 has gained 115% over the same period. Such strong historic performance is impressive. But the firm's sales are increasingly dependent on Chinese spending at home and abroad and with global trade tensions mounting, this could become a problem.

Management warned recently that they expect tariffs to rise to 25% on jewellery exported from US to China. This could put pressure on margins in the increasingly important Chinese domestic market. At the same time,…

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Can Tiffany still sparkle as China trade war heats up?

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