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): August 16, 2001
TIFFANY & CO.
(Exact name of Registrant as specified in its charter)
Delaware 1-9494 13-3228013
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) 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 August 16, 2001, Registrant issued the following press release
announcing its sales and earnings for the three-month period ended July 31,
2001:
NEW YORK, August 16, 2001 - Tiffany & Co. (NYSE-TIF) reported that net sales of
$371,301,000 in the second quarter ended July 31, 2001 were 1 percent lower than
$374,448,000 a year ago. Net earnings declined 8 percent to $36,052,000, or 24
cents per diluted share, compared with $39,165,000, or 26 cents per diluted
share, a year ago. Net sales and net earnings increased 21 percent and 70
percent, respectively, in the second quarter of 2000.
Second quarter U.S. comparable store sales declined 4 percent, in line with
guidance provided in the Company's July 10th press release. Worldwide, on a
constant-exchange-rate basis, which excludes the effect of translating
local-currency-denominated sales into U.S. dollars, Tiffany's net sales rose 4
percent and comparable store sales rose fractionally.
For the six months (first half) ended July 31st, net sales of $707,702,000 were
2 percent below $719,591,000 a year ago. Net earnings of $66,814,000, or 44
cents per diluted share, were 4 percent below $69,590,000, or 46 cents per
diluted share, in the prior year.
Michael J. Kowalski, president and chief executive officer, said, "The current
retail environment in the U.S. and certain international markets contrasts
sharply with favorable conditions a year ago. The impact on our short-term
results is certainly not surprising, and we remain confident in the inherent
strength and potential of Tiffany's underlying business."
Results in Tiffany's three channels of distribution were as follows:
o U.S. Retail sales declined 1 percent to $186,163,000 in the second quarter
and 4 percent to $345,175,000 in the first half, due to comparable store
sales declines of 4 percent in the quarter and 6 percent in the half.Second
quarter and first half
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comparable store sales in Tiffany's flagship New York store declined 6
percent and 11 percent, while U.S. branch stores declined 3 percent and 4
percent. Results reflected a lower level of customer spending per
transaction that offset a greater number of transactions. In 2000, U.S.
comparable store sales increased 19 percent in the second quarter and 23
percent in the first half.
o International Retail sales declined 2 percent to $150,574,000 in the second
quarter and 1 percent to $296,997,000 in the first half. On a constant-
exchange-rate basis, International Retail sales increased 9 percent in both
the second quarter and first half. Comparable store sales in the second
quarter and first half rose 6 percent in both periods in Japan, 3 percent
and 2 percent in other Asia-Pacific markets and 17 percent and 15 percent
in Europe on a constant-exchange-rate basis.
o Direct Marketing sales rose 6 percent in the second quarter to $34,564,000
and 8 percent to $65,530,000 in the first half. Sales in the second quarter
and first half declined 5 percent and rose 2 percent in Tiffany's corporate
division, while combined catalog/Internet sales rose 18 percent and 17
percent in those periods.
Mr. Kowalski added, "Tiffany's extraordinary product selection is appreciated by
growing numbers of customers in existing and new markets. Store expansion in the
first half of 2001 included the opening of new locations in San Jose, Melbourne,
Sao Paolo and Japan (three boutiques). In the second half of the year, new
locations are planned to open in Tampa, Rome, London (a third location) and
Tokyo (one boutique). Merchandising initiatives include introducing an exciting
assortment of new product designs. Our long-term success will continue to be
driven by a disciplined approach toward executing our business plan and will not
be affected by short-term cycles. "There is widespread uncertainty about the
timing and magnitude of a global economic recovery. While the first two weeks of
August indicate a continuation of recent sales trends in the U.S. and some
improvement in Japan, we assume that current economic conditions will improve
more gradually than originally anticipated. Based on that revised assumption and
an approximate continuation of second quarter sales and margin trends,
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we now expect that third quarter earnings per diluted share will be in a range
of 22 - 24 cents, versus 24 cents in the prior year. For the fourth quarter, we
now expect that, based on modestly improving U.S. comparable store sales trends,
earnings will increase to a range of 60 - 65 cents per diluted share, versus 56
cents last year. This would result in full year earnings equal to, or slightly
above, the prior year and we expect further gradual acceleration throughout
2002," Mr. Kowalski concluded.
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 at 8:30 a.m. (EST) to review
second quarter results and the outlook. Interested parties may listen to a
broadcast on the Internet at www.shareholder.com/tiffany, www.vcall.com or
www.streetevents.com.
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 2000 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 Six months
ended July 31, ended July 31,
--------------------------------- ------------------------------------
2001 2000 2001 2000
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Net sales $ 371,301 $ 374,448 $ 707,702 $ 719,591
Cost of sales 155,430 161,994 301,691 318,428
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Gross profit 215,871 212,454 406,011 401,163
Selling, general and administrative expenses 150,201 145,377 291,120 280,691
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Earnings from operations 65,670 67,077 114,891 120,472
Other expenses, net 5,581 1,804 3,534 4,489
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Earnings before income taxes 60,089 65,273 111,357 115,983
Provision for income taxes 24,037 26,108 44,543 46,393
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Net earnings $ 36,052 $ 39,165 $ 66,814 $ 69,590
============ ============= ============== ==============
Net earnings per share:
Basic $ 0.25 $ 0.27 $ 0.46 $ 0.48
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Diluted $ 0.24 $ 0.26 $ 0.44 $ 0.46
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Weighted average number of common shares:
Basic 146,042 145,165 145,979 145,132
Diluted 151,752 151,546 151,509 151,689
Certain reclassifications were made to the prior year's condensed consolidated
statements of earnings.
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TIFFANY & CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
July 31, January 31, July 31,
2001 2001 2000
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ASSETS
Current assets:
Cash and cash equivalents $ 112,730 $ 195,613 $ 174,662
Accounts receivable, net 92,077 106,988 100,526
Inventories, net 667,799 651,717 559,675
Deferred income taxes 36,037 28,069 33,131
Prepaid expenses and other current assets 38,574 22,458 33,969
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Total current assets 947,217 1,004,845 901,963
Property, plant and equipment, net 473,107 423,244 339,626
Deferred income taxes 4,446 7,282 5,681
Other assets, net 152,797 132,969 132,938
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$ 1,577,567 $ 1,568,340 $ 1,380,208
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 51,294 $ 28,778 $ 28,671
Obligation under capital lease 40,726 40,747 0
Accounts payable and accrued liabilities 151,986 189,531 181,246
Income taxes payable 16,208 42,085 19,067
Merchandise and other customer credits 36,968 36,057 31,569
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Total current liabilities 297,182 337,198 260,553
Long-term debt 235,437 242,157 247,239
Postretirement/employment benefit obligations 27,926 26,134 24,684
Other long-term liabilities 40,974 37,368 34,980
Stockholders' equity 976,048 925,483 812,752
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$ 1,577,567 $ 1,568,340 $ 1,380,208
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Certain reclassifications were made to the prior periods' condensed consolidated
balance sheets.
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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/ Patrick B. Dorsey
____________________________________
Patrick B. Dorsey
Senior Vice President, Secretary and
General Counsel
Date: August 16, 2001
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