In our school days, there was a saying, “A stitch in time saves nine”, meaning that timely action may prevent serious loss later on. How about applying the same principle to your portfolio? Exiting the underperforming stock at the right time helps maximize your portfolio's return. Tiffany & Company (TIF – Analyst Report), the jewelry retailer, is one such stock that has been witnessing a downtrend in the Zacks Consensus Estimate and holds a Zacks Rank #4 (Sell). This implies that analysts covering the stock are not convinced about Tiffany's performance in the near future.

After witnessing negative earnings surprises in the second and third quarters of fiscal 2015, Tiffany posted a positive earnings surprise in the final quarter, with earnings of $1.46 per share that outperformed the Zacks Consensus Estimate of $1.40. However, we observe that the company's dwindling top- and bottom-line results remain the primary concern for investors.

A look at Tiffany's performance in fiscal 2015 unveils that earnings per share fell 7.9% and 3% year over year in the third and fourth quarters, respectively. Maintaining the same chronological order, we note that net sales also declined 2.2% and 6%, respectively. A mature domestic market, foreign currency headwinds and cautious consumer spending continue to pose concerns.

Management anticipates earnings per share for fiscal 2016 to range from flat to a mid-single-digit decline in comparison to earnings of $3.83 in fiscal 2015. Tiffany projects earnings to decline by 15%–20% in the first quarter fiscal of 2016, followed by a 5%–10% decrease in the second quarter. However, it anticipates an improvement in the second half of the fiscal year.

Consequently, over the past 30 days, the Zacks Consensus Estimate of $3.74 and $4.06 per share for fiscal 2016 and fiscal 2017 has dropped 2.3% and 3.6%, respectively. Moreover, the Zacks Consensus Estimate for the first quarter has decreased 10.4% to 69 cents over the same time frame.