SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
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Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 1, 2001
TIFFANY & CO.
(Exact name of Registrant as specified in its charter)
Delaware 1-9494 13-3228013
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification
Number)
727 Fifth Avenue, New York, New York 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 755-8000
Item 5. Other Events.
On March 1, 2001, Registrant issued the following press release announcing
its sales and earnings for the three-month period and fiscal year ended January
31, 2001:
TIFFANY'S NET EARNINGS ROSE 31 PERCENT IN 2000
NEW YORK, March 1, 2001 - Sales and earnings at Tiffany & Co. (NYSE-TIF) rose to
record levels in 2000, despite cautious customer spending in the fourth quarter.
Net earnings in the year rose 31 percent due to a 13 percent net sales increase
and an improved operating margin. Worldwide comparable store sales increased 13
percent on a constant currency basis.
Fourth quarter results, which were affected by difficult pre-millennium
comparison and economic/market factors, were consistent with the Company's
holiday season sales announcement made on January 4, 2001.
In the year ended January 31, 2001, net sales rose 13 percent to $1,668,056,000,
versus $1,471,690,000 in the prior year. Net earnings rose 31 percent to
$190,584,000, or $1.26 per diluted share, compared with $145,679,000, or $0.97
per diluted share, in the prior year.
In the fourth quarter ended January 31, 2001, net sales of $576,391,000 were 2
percent higher than $563,195,000 a year ago. Net earnings of $84,674,000 or 56
cents per diluted share, were fractionally higher than $84,579,000, or 56 cents
per diluted share, a year ago.
Net earnings per share figures are adjusted to reflect the Company's two-for-one
stock split in July 2000.
Sales by channel of distribution were as follows:
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o U.S. Retail sales rose 12 percent to $833,221,000 in the full year,
primarily due to comparable store sales growth of 12 percent. In the fourth
quarter, sales rose 1 percent to $292,433,000 and comparable store sales
declined 1 percent (following a 26 percent increase in the prior year).
Sales in Tiffany's flagship New York store rose 6 percent in the year but
declined 5 percent in the fourth quarter. Comparable branch store sales
rose 15 percent in the year and 1 percent in the fourth quarter. New stores
opened during the past year performed well.
o International Retail sales rose 15 percent to $679,274,000 in the year and
3 percent to $223,844,000 in the fourth quarter due to growth in most
markets. In Japan, comparable store sales in local currency rose 11 percent
and 8 percent in the year and fourth quarter, respectively, but, when
translated into U.S. dollars, rose 13 percent and nil percent for those
periods, respectively.
o Direct Marketing sales, which includes corporate, catalog and Internet
sales, increased 13 percent to $155,561,000 in the year and 7 percent to
$60,114,000 in the fourth quarter. The Company commenced Internet sales in
November 1999.
Michael J. Kowalski, president and chief executive officer, said, "Full year
results in 2000 extended our record of strong annual sales and earnings growth,
although recent uncertainty surrounding the economy and equity markets, not
surprisingly, affected customers' average spending levels. At this point, we
remain comfortable with the published range of security analysts' earnings
estimates for the first quarter of 2001 and the full year, although trends early
in the quarter continue to be sluggish in the U.S. and in some international
markets. In light of expectations for continued unsettled economic conditions in
the coming months, as well as tough comparisons to last year's strong first
half, we believe it is prudent to expect earnings in the first half of 2001 to
be approximately equal to the prior year."
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Mr. Kowalski added, "Despite the temporary slowdown in the business cycle,
Tiffany's competitive and financial strengths position us extremely well to
maintain the normal pace of our strategic pursuit of expansion, merchandising
and marketing opportunities. We have tempered near-term expectations, but our
longer-term potential remains substantial."
2001 OUTLOOK
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The Company's financial expectations are based on the assumption that U.S.
consumer confidence will improve in the second half of 2001. Financial
expectations include: net sales growth in the high-single-digit range due to
comparable store sales growth in the mid-single-digit range in the U.S. (with
lower growth in the first half of 2001) and in the high-single-digit range in
Japan, healthy growth in other international markets, new store openings in U.S.
and international markets, and healthy growth in Direct Marketing sales; modest
improvements in gross margin and in the operating expense ratio; higher interest
expense; an unchanged tax rate; and annual net earnings growth of 10-15 percent.
Tiffany & Co. is the internationally renowned jeweler and specialty retailer.
Sales are made primarily through TIFFANY & CO. stores and boutiques in the
Americas, Asia-Pacific, Europe and the Middle East. Direct Marketing includes
Tiffany's corporate division, catalog and Internet sales. Additional information
can be found on Tiffany's Web site, www.tiffany.com, and on its shareholder
information line (800) TIF-0110.
The Company will host a conference call today to review these results at 8:30
a.m. (EST). Interested parties may listen to a live Web broadcast by accessing
www.shareholder.com/tiffany or www.vcall.com on the Internet.
This press release contains certain "forward-looking" statements concerning
expectations for sales, margins and earnings. Actual results might differ
materially from those projected in the forward-looking statements. Information
concerning factors that could cause actual results to differ materially are set
forth in Tiffany's 1999 Annual Report and in Form 10-K, 10-Q and 8-K Reports
filed with the Securities and Exchange Commission. The Company undertakes no
obligation to update or revise any forward-looking statements to reflect
subsequent events or circumstances.
# # #
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TIFFANY & CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited, in thousands, except per share amounts)
Three months
ended January 31, Years Ended January 31,
--------------------------------- -----------------------------------
2001 2000 2001 2000
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Net sales $ 576,391 $ 563,195 $ 1,668,056 $ 1,471,690
Cost of sales 235,505 224,953 719,642 650,010
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Gross profit 340,886 338,242 948,414 821,680
Selling, general and administrative expenses 197,014 192,233 621,018 564,797
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Earnings from operations 143,872 146,009 327,396 256,883
Other expenses, net 2,750 2,655 9,755 8,825
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Earnings before income taxes 141,122 143,354 317,641 248,058
Provision for income taxes 56,448 58,775 127,057 102,379
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Net earnings $ 84,674 $ 84,579 $ 190,584 $ 145,679
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Net earnings per share:
Basic $ 0.58 $ 0.58 $ 1.31 $ 1.02
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Diluted $ 0.56 $ 0.56 $ 1.26 $ 0.97
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Weighted average number of common shares:
Basic 145,898 144,870 145,493 142,968
Diluted 151,705 152,114 151,816 149,666
Net sales, Cost of sales, Gross profit and Selling, general and administrative expenses are reclassified for
all periods presented to reflect the adoption of the Emerging Issues Task Force's Issue 00-10, "Accounting
for Shipping and Handling Revenues and Costs."
Net earnings per share and the number of shares are adjusted to reflect a July 2000 two-for-one stock split.
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TIFFANY & CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
January 31, January 31,
2001 2000
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ASSETS
Current assets:
Cash and cash equivalents $ 195,613 $ 216,936
Accounts receivable, net 106,988 119,356
Inventories, net 651,717 504,800
Deferred income taxes 28,069 30,212
Prepaid expenses and other current assets 22,458 20,357
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Total current assets 1,004,845 891,661
Property and equipment, net 423,244 322,400
Deferred income taxes 7,282 6,235
Other assets, net 132,969 123,266
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$ 1,568,340 $ 1,343,562
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 28,778 $ 20,646
Obligation under capital lease 40,747 -
Accounts payable and accrued liabilities 189,531 176,101
Income taxes payable 42,085 53,954
Merchandise and other customer credits 36,057 30,275
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Total current liabilities 337,198 280,976
Long-term debt 242,157 249,581
Postretirement/employment benefit obligations 26,134 23,165
Other long-term liabilities 37,368 32,764
Stockholders' equity 925,483 757,076
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$ 1,568,340 $ 1,343,562
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TIFFANY & CO.
BY: /s/ James N. Fernandez
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James N. Fernandez
Executive Vice President and
Chief Financial Officer
Date: March 1, 2001
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