- Tiffany's Americas segment had its first negative same-store sales resLIt since the fiscal third quarter of 2009. (Yes, that would be during the "Great Recession.")
- It's apparent that a resistance to tempering new store opening plans globally is raising the hurdle rate for leverage -- that is, it's driving operating-margin expansion.
- Same-store sales at the New York flagship and branch stores declined at a faster rate relative to the first quarter. Although the tourist travel and spending issue is top of mind amongst investors, branch-store sluggishness deserves more attention -- regarding financial industry considerations, for example. Moreover, when opting for a discretionary purchase, an aspirational customer is reaching for a pair of shoes or a Michael Kors (KORS) handbag.
- The fiscal 2012 earnings-per-share range dropped for the second time this year due to more caution around operating margin. It makes one wonder about third-quarter trends to date.
- If Tiffany is having a volume problem, that is exposing a rising cost base -- price increases are the norm.
- Inventories weren't exactly in line to guidance provided on the fiscal first-quarter earnings call, and likely were elevated as demand again surprised negatively.
There is an undeniable trend in reality television: If the star of the show ain't a-yellin', they ain't doing their jobs of entertaining viewers -- and unhappy viewers mean kissing goodbye those precious advertising dollars. (Sorry, Facebook ( FB), there are none for you). But this isn't yelling just for the sake of yelling; it's to enact change in a person that is badly in need of help. Look no further than Spike's "Bar Rescue," in which an expert bar developer swoops into save the finances of a troubled hole in the wall, or Fox's "Kitchen Nightmares," in which a world-renowned chef fixes restaurants and families. It's touching, I know. These are no longer "Little House on the Prairie" TV-watching days, that's for sure. After some deep thought, I have concluded these trained professionals are on to something with their verbal shock treatment. Considering this is trading-day eight of my bearishness, and likely day eight of the bulls sending emails indicating that I am nutso, here is the deal on this particular move to the sidelines call. Before we can return for a swim in the pool of optimism, there are specific fundamental events that will have to transpire. Let's be brutally honest: We are flying near blind into important dates next month with tired themes for the bulls, and the bears are still doing dot-connecting rather than sitting back and watching the fruits of their labor. Volume: When the heavy hitters return to their desks next week, stocks leveraged to the good fortunes of the U.S. economy had best perk up -- no excuses. If we can get FedEx ( FDX) or UPS ( UPS) working, that'd be great, but a key cog in the wheel of the bulls is that a strengthening labor market will transmit to reaccelerating gross domestic product growth in the third and fourth quarters. If there's no sign of life in companies bringing in above 50% of their annual revenue domestically, throw a caution flag. That's especially relevant since the Street is overly bullish on cyclicals. Romney: Beneath all of the attack ads from both parties, there is a presidential challenger in presumptive Republican nominee Mitt Romney who has meaningfully closed the opinion-poll gap with a sitting president. The pendulum will have to swing further in order to pique the interest of the market to a stronger degree than we have seen thus far. Call me crazy, but if Romney pulls ahead of President Obama, the market may just place on its Reagan glasses. Yes, it's a different time and place, but the optics would be such that the economy could extract itself from a sluggish post-recession recovery quicker than feared -- and avert significant fiscal cliff downside.
August employment report: It pains me to say, but if you want to see stocks regain their mojo, you have to root for a disappointing August employment report. I believe there is a distinct possibility here, given key aspects of various manufacturing reports and numerous signs of increased caution on hiring by Corporate America. A lame jobs report will reignite the potential for swift Federal Reserve action at its next meeting, which would temper the concerns about the no-action possibility that has emerged in the past two weeks. That summarizes my thoughts as they pertain to an attack plan. Oh, before I forget, chill on taking seriously any Tiffany ( TIF) buy ratings for at least a year. The share pop has now unduly raised investor hope, and you should not have chased Monday, or ponder doing so Tuesday. Here is why.