SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 8-K
CURRENT REPORT
-----------------------
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 14, 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 November 14, 2001, the Registrant issued the following press release
announcing its sales and earnings for the three-month period ending October 31,
2001:
NEW YORK, November 14, 2001 - Tiffany & Co. (NYSE-TIF) reported its results for
the third quarter ended October 31, 2001. Net sales of $333,074,000 were 10
percent lower than $372,074,000 a year ago. Net earnings declined 34 percent to
$24,028,000, or 16 cents per diluted share, compared with $36,320,000, or 24
cents per diluted share, in the third quarter of 2000.
In the nine months (year-to-date) ended October 31, 2001, net sales of
$1,040,776,000 were 5 percent below $1,091,665,000 a year ago. Net earnings
declined 14 percent to $90,842,000, or 60 cents per diluted share, from
$105,910,000, or 70 cents per diluted share, in 2000.
On a constant-exchange-rate basis which excludes the effect of translating
local-currency-denominated sales into U.S. dollars, Tiffany's worldwide net
sales declined 7 percent in the quarter and 1 percent in the year-to-date, and
worldwide comparable store sales declined 11 percent in the quarter and 4
percent in the year-to-date.
Michael J. Kowalski, president and chief executive officer, said, "The current
retail environment is clearly a difficult one, with numerous factors having an
adverse effect on the mood of consumers in the U.S. and around the world. For
Tiffany, the environment also contrasts sharply with the third quarter of 2000
when we achieved sales and earnings growth of 15 percent and 65 percent.
However, Tiffany maintains a leading industry position and is poised to deliver
strong financial performance when external conditions ultimately improve."
Results in Tiffany's three channels of distribution were as follows:
o U.S. Retail sales in the third quarter declined 17 percent to
$152,068,000 and year-to-date sales declined 8 percent to $497,243,000.
Comparable store sales declined 19 percent in the third quarter and 10
percent in the year-to-date. For the third quarter and year-to-date,
comparable store sales declined 29 percent and 17 percent in Tiffany's
flagship New York store and declined 16 percent and 8 percent in U.S.
branch stores. Sales declines resulting from a smaller average transaction
size were compounded by a reduction in store traffic since the tragic
events of September 11th. New stores that opened this year in San Jose and
Tampa have performed well.
1
o International Retail sales in the third quarter declined 5 percent to
$147,220,000 and year-to-date sales declined 2 percent to $444,217,000. On
a constant-exchange-rate basis in the third quarter and year-to-date,
International Retail sales increased 4 percent and 7 percent. By major
region, comparable store sales on a constant-exchange-rate basis in the
third quarter and year-to-date rose 1 percent and 4 percent in Japan;
declined 4 percent and were unchanged in other Asia-Pacific markets; and
declined 12 percent and rose 5 percent in Europe.
o Direct Marketing sales in the third quarter declined 3 percent to
$33,786,000 and year-to-date sales increased 4 percent to $99,316,000.
Tiffany's Business Sales Division (name changed from Corporate Division)
experienced declines of 20 percent and 6 percent in the third quarter and
year-to-date. However, combined Catalog/Internet sales increased 19 percent
and 18 percent in those periods.
Mr. Kowalski continued, "We are focused on Tiffany's substantial long-term
growth potential. Fortunately, we possess the financial strength to continue our
planned investments in new stores, product development and related
infrastructure. Year-to-date, we opened two new stores in the U.S. and five
internationally, with new stores opening in the fourth quarter in Tokyo, London
(a third location), Rome and Beijing. Additionally, we've complemented our
product assortment with a number of exciting new jewelry designs, including our
magnificent Lace jewelry collection."
"We have been dealing with varying degrees of global uncertainty and at mid-year
we projected difficult retail conditions for the remainder of 2001. Of course,
any forecast is always subject to numerous uncertainties, but we now believe
that a challenging retail environment will persist through the first half of
2002. We have not yet seen improvement in the beginning of November, but
year-over-year U.S. comparisons will ease in the coming weeks. Based on our
assumptions, we expect overall sales in the fourth quarter to decline from last
year by a mid-single-digit percentage. This would result from comparable store
sales declining by a low-double-digit percentage in the U.S. and,
internationally on a constant-exchange-rate basis, increasing by
low-single-digits in Japan with no growth in Asia-Pacific outside Japan or in
Europe. Combined with a modest increase in gross margin due to sales mix as well
as continued expense control, we continue to expect fourth quarter earnings in
the range of 49 - 56 cents per diluted share (versus 56 cents last year), and
full year earnings in the range of $1.09 - $1.16 per diluted share (versus $1.26
in 2000). Our preliminary expectation for 2002 continues to call for
single-digit percentage earnings growth on a full-year basis due to gradually
improving comparable store sales trends, as well as ongoing benefits from our
initiatives in store expansion, product development and marketing communication.
As we formulate our plans in the coming months, we will provide greater
clarification of our expectations. We plan to report holiday sales on Tuesday
January 8th," Mr. Kowalski concluded.
2
In its authorized program, the Company repurchased and retired 1,250,000 shares
of its Common Stock in the third quarter at an average cost of $22.39 per share.
Approximately $61,000,000 remains available for future repurchases in the
program that expires in 2003.
The Company will host a conference call today at 8:30 a.m. (EST) to review its
third quarter results and outlook. Interested parties may listen to a broadcast
on the Internet at www.shareholder.com/tiffany, www.vcall.com or
www.streetevents.com.
Tiffany & Co. is the internationally renowned jeweler and specialty retailer.
Sales are made primarily through company-operated TIFFANY & CO. stores and
boutiques in the Americas, Asia-Pacific and Europe. Direct Marketing includes
Tiffany's Business Sales 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.
This press release contains certain "forward-looking" statements concerning
expectations for sales, margins, expenses 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.
# # #
3
TIFFANY & CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited, in thousands, except per share amounts)
Three months Nine months
ended October 31, ended October 31,
---------------------------------- ------------------------------------
2001 2000 2001 2000
------------- ------------- -------------- ---------------
Net sales $ 333,074 $ 372,074 $ 1,040,776 $ 1,091,665
Cost of sales 140,235 165,709 441,926 484,137
------------- ------------- -------------- ---------------
Gross profit 192,839 206,365 598,850 607,528
Selling, general and administrative expenses 146,798 143,313 437,918 424,004
------------- ------------- -------------- ---------------
Earnings from operations 46,041 63,052 160,932 183,524
Other expenses, net 5,993 2,516 9,527 7,005
------------- ------------- -------------- ---------------
Earnings before income taxes 40,048 60,536 151,405 176,519
Provision for income taxes 16,020 24,216 60,563 70,609
------------- ------------- -------------- ---------------
Net earnings $ 24,028 $ 36,320 $ 90,842 $ 105,910
============= ============= ============== ===============
Net earnings per share:
Basic $ 0.17 $ 0.25 $ 0.62 $ 0.73
============= ============= ============== ===============
Diluted $ 0.16 $ 0.24 $ 0.60 $ 0.70
============= ============= ============== ===============
Weighted average number of common shares:
Basic 145,273 145,809 145,743 145,357
Diluted 150,114 152,136 151,046 151,853
Certain reclassifications were made to the prior year's condensed consolidated
statements of earnings.
4
TIFFANY & CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
October 31, January 31, October 31,
2001 2001 2000
------------------ ------------------ -------------------
ASSETS
Current assets:
Cash and cash equivalents $ 106,404 $ 195,613 $ 121,143
Accounts receivable, net 99,094 106,988 100,662
Inventories, net 702,752 651,717 657,106
Deferred income taxes 38,030 28,069 36,525
Prepaid expenses and other current assets 42,795 22,458 42,499
-------------- -------------- --------------
Total current assets 989,075 1,004,845 957,935
Property, plant and equipment, net 511,271 423,244 356,847
Deferred income taxes 5,360 7,282 5,046
Other assets, net 151,087 132,969 132,831
-------------- -------------- --------------
$ 1,656,793 $ 1,568,340 $ 1,452,659
============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 113,331 $ 28,778 $ 36,850
Obligation under capital lease 45,221 40,747 0
Accounts payable and accrued liabilities 183,685 189,531 213,848
Income taxes payable 2,543 42,085 5,750
Merchandise and other customer credits 35,418 36,057 32,679
-------------- -------------- --------------
Total current liabilities 380,198 337,198 289,127
Long-term debt 237,548 242,157 247,859
Postretirement/employment benefit obligations 28,822 26,134 25,444
Other long-term liabilities 41,806 37,368 36,170
Stockholders' equity 968,419 925,483 854,059
-------------- -------------- --------------
$ 1,656,793 $ 1,568,340 $ 1,452,659
============== ============== ==============
Certain reclassifications were made to the prior periods' condensed consolidated
balance sheets.
5
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
____________________________________
Senior Vice President, Secretary and
General Counsel
Date: November 14, 2001
6