(Photo Credit: Elvis Fool)

Before tomorrow’s opening bell we get Q1 results from two high-end luxury retailers, Michael Kors and Tiffany & Co. While the former is expected to post strong results, the same can not be said for the latter.

For the first quarter, the Estimize community expects Michael Kors (KORS) to post earnings per share (EPS) of $0.93, 2 cents better than the Wall Street expectation. Revenue estimates are roughly in-line at $1.1B. This would mark year-over-year growth of 19% on the bottom-line and 18% on the top-line; the company has recorded nothing less than double digit growth on each of these measures since they IPO’d in late 2011. Despite strong fundamentals, there seems to be a disconnect with how the stock has traded, down around 20% for the year on speculation that Kors might come undone like competitor Coach. Unlike Kors, Coach has reported very weak fundamentals for several quarters now, yet up until recently saw large upward movements in their stock price on hopes that the accessories retailer was turning things around. The fear surrounding Kors at the moment is that their items are becoming too accessible. The line sells at the very high-end, but also at the mid-tier level. Selling at those lower price points makes commonality a risk, which can remove the value and cache from the brand.

On the other end of the luxury spectrum is Tiffany’s (TIF). While the Estimize community is looking for EPS of $0.81, 12 cents higher than the Street, that number has fallen dramatically in the last few weeks, and will likely fall further before tomorrow’s report. Revenues of $971M are above the Street’s estimate for $927M. This would mean a decrease in profits of about 16% and a fall of 4% on the top-line. Management is looking for even steeper year-over-year declines of 30% and 10%, respectively, on account of the stronger dollar. The stronger dollar hurts Tiffany’s in two ways. First off, the luxury retailer derives close to half of its sales from overseas, therefore repatriation of those sales to the US dollar reduces the top-line. Management also worries that the rise in the dollar will impact US sales. Tiffany’s relies on wealthy travelers to shop in their upscale stores in this country, but fear that the stronger dollar may cause international tourists to be more conservative with their discretionary income.