TIF - Earnings call transcript Q4 2017

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Operator

Good day, everyone and welcome to the Tiffany & Company's Fourth Quarter 2017 Conference Call. Today's call is being recorded. Participating on today's call is Mr. Alessandro Bogliolo, Tiffany Chief Executive Officer; Mr. Mark Erceg, Tiffany Chief Financial Officer; and Mr. of President Vice Aaron, Investor Relations. Mark turn will the call Mr. to over I Aaron. Mark

Mark Aaron

and Erceg day, Thank some performance, our and to and; pleased you observations, CEO outlook. CFO, everyone. Bogliolo today's about and strategies, good insights On and call, Tiffany's to with here me, I commentary am Alessandro our share Mark recent have

calls will We add, that should questions, and take on will questions I then allow time to as all future forward your we well. answer going

that note not events by forward-looking Actual or from as please Before required on are or results obligation or expected made materially forward-looking regulation. company The continuing, by to applicable call these that or statements law revise undertakes historical this differ expressed statements, assumed, facts statements. update in the forward-looking results or are planned, no subsequent circumstances. implied any Except statements. might reflect to

Both today earlier well as filed information financial Commission, hand today Exchange of left on column. uncertainties differ under the as cause factors, investor be GAAP concerning could filed actual forth that could measures, information as cover referenced www.tiffany.com, is the Form release news measures non-GAAP with required by selecting found the Securities X-K. to Tiffany's results to filings the Form site, this set in and risks, their Additional web XX-K Tiffany's presentation comparable well as reconciliations in and in materially, of the

we to believe I proceed, I Alessandro. over So now call and turn will can the

Alessandro Bogliolo

we pleased answer would share then all like you a be to few Thank to later, with you, of Mark. morning. thoughts and your questions. I Good will

very and this I first capabilities business and six joined by with have you dedicated work I tell increasingly my is senior I In business. in been We of company, and available growth colleagues, here people Tiffany remarkably As opportunities of our powerful. Directors. the excited believe the that of months, us can to brand management with a about our all you strategic all October, talented Board our am last and aspects assessment the of I amazing active our my that pursuing review know,

is mission enduring larger that than for Tiffany generations. to Simply of put, would to beauty, Our be beautiful creators designs be joy. life, brings of cherished makers

Our create everybody's finest artisans memorable the purpose craft some world's timepieces for jewelry, accessories, of joy our of is Tiffany and customers. to moments yet at ultimate

follow. we we an of where have somewhat We agreed we direction need One, that on those characterize of priorities, sustainable also totally need that six investment strategies, must spending and also will the accelerate of I the agree, evolution the to the But achieve and review been. Tiffany that has as would required of. is of strategic pace we capable we that forward. Tiffany strategic focused a to I sales set The on as outcome growth to believe our of increase earnings be move is that execution

brand the priority an Now is evolved message. first amplifying

as We of will evolution the more evident our recent communications, year Love The see Believe media. have begun campaign. in you, marketing already and above messaging is our variety to through to example be marketing one progresses, some in a

Our the renewing financing priority and our presentation. offerings second in-store is product

that product across rate accomplish an introductions all will through accelerated We of categories.

jewelry design jewelry. new Specifically, units will more our in in and distinctive workshop be instrumental innovation developing

the in visual our also merchandising have of allocated stores. assortments resources planned we Importantly, and evolve to

capabilities expectations, that years, and the and match or in are We fluid our on has stores web all to past Tiffany enhance while focused whether know sites. their more omnichannel seamless functionalities made our are e-commerce Tiffany on our its customer Third, than must customers now evolving growing ever a we in shopping, progress delivering experience. and in efforts our

efficient so operating of appropriate, that intend core growth drive our growth. their more our business, of we such our the to of margin calculate major that processes, through achieve fourth and is model. procurement, grow expense vision systems, continuation can as revamp when restraining we ultimately We As IT while priority selected a a to all

is to and organization inspire talented align that Our with add fifth and people, an to win. priority said I that organization description. I would dedicated agile and filled is to before, Tiffany passionate

everyone acceleration called shared Now, sense direction with upon colleagues, healthy our is to clear our sustainable longest a focus and from newest of a growth. of to tenured on urgency, and

luxury and these well. competitive and and fragmented, reach the is final of key strength strengthen global global to lead initiatives, position position industry and priority all from our our competitively brand Following is very The jewelry in markets. us

teams regional digital and the in communities. relationships thus leverage brand the physical power of are market customers, empowered their network our share that local with and to Our increase relevance, to and

grow. As better At not if because and the Tiffany industry least peers. with, brand the strongly I line said call, last on to Co. opportunities accepted in than this tremendous healthy, I that position believe but it has I our also is

some in make we you to and allow coming you. remaining just adapt stop appreciate heritage company. weeks As and some course, here this months, Mark your comments interest will great Mark and questions. your brand Thank forward, to leverage before our true to our while take always we Well, core integrity. move add in that we and of look meeting and and I appropriate, strength will of will forward as I the I

Mark Aaron

Thanks insights. Alessandro sharing for those

our product the you in highlights We January, ranging the fourth read at look to I hope region focus we the that sales holiday growth some results. with pretty news reports categories. XX% by had all in total reported growth Europe results Japan. our indicated business X% sales across and from performance. of which I quarter improvements regions, quarter varying to opportunity are all had degrees consistent an in the release, in of the financial in sales in have These just on let's had so will sales of key call of Now on

a performance constant the viewed Although bit rate basis. when was exchange a on different

increased in Jewelry regional that the had Jewelry categories, in sales category, ranging driven from growth in the was growth Collections quarter, and increase decline We the all expense, our much to a SG&A category, an net with in we in growth were product in gross in unit and line volume. the by as growth forecast. pretty fractional margin strongest saw also earnings expected, We Engagement and

XXXX year the basis Let's fourth the it solid to each total, performance had the quarter with Sales improvement U.S., the sales and was increase sold. in pleased E-commerce regions; based largely attributed quarter, beginning and in year of after full some were Latin in that also was the America, the look growth at in finish Americas local spending a across a in a solid there in as declining we was the comp increase generated by sales, progressed, on year. and continued and higher with to increase comprised in quarter jewelry units customers. broad was and Canada sales geographically

to the attributed that we couple dollar spending the here. a foreign on repercussions year, improvement past the spending U.S. of tourist is strong the an negative years, of While quarter in and tourists when from was nonetheless from its unchanged prior face challenge

XX% XX we foreign in the Latin of tourists activity Americas, in region, estimate For in the to and that than and a attributed finished spending less in America. store bit represented operating all including modest It XX U.S., the Canada XXX we the in was XXXX the XX of U.S. sales. stores XXXX,

of the our a throughout accessories year and full their stores. every sales In to Pacific year Results were some in store been in we ever region the part but addition Hong Asia reflecting in And store, in and returned New well, in fourth tourists. floor Chinese favorable York Pacific has tradition. some in of prior declines. first we the and stores collection Asia the Mainland China pleased to the XXXX, to of last less top-up mixed the the quarter sales partly as after in the New attribute the Asia to the showcase of Sales greater results. by in we of quite of Pacific represented sales were XX% that years at become similar new Blue one home as include with our Results open which not opening increase York year. noted opening in we have our also Flagship were in fast tested countries, the with year, did roughly in spending on renovated which quarter, pleased other we Kong latter to Café, fourth fourth region XXXX, we count, lower three new and do call, our least growth We China quarter to Box and total store partly growth in

Chinese store comp the volume Korea in which, that very both largely sales in we wholesale Overall, fourth year, in noting our and free sales, up included strong, growth worth while jewelry it's tourists. reflect unit However, attribute to quarter throughout demand not year. the duty sales was

total and in across During increased in many, no the year, new U.K. local from spending and We sales. the to region finished region. the was existing quarter-to-quarter the operating five year. believe fluctuated store three, discernible effect represent major difficult about the pleased we price sales through full store stores. year due pattern changes as results and Moscow, Pacific to quarter finished XXXX the region, results in is soft in volume which Milan Japan quarter We opened and was Europe, and Most in translation attributed there the affected negatively European of Japan to and year, of renovated closed in dollars, and European XX% openings the closed Asia four XX the reported one throughout in much operating the were relocated we stores store stores Performance continued the with year year, the unit Japan although stronger customers, and in in In to or of in reflecting some primarily in sales. and comparisons. year-over-year currencies, XX

quarters we rate periods. different And In but in were The sales addition, we generated on growth declined three that both comp bit a in by European local a estimate constant largely which to and our exchange a reported as in growth dollars, higher rose in basis spending that periods. while store basis, total on was lesser pleased periods, represent about in both in sales. attribute picture volume unit was sales Europe with extent, the to we jewelry of customers, both

wholesale opened year in sales During three resulted the we increased year, the the region. the from and with primarily in Europe diamonds. quarter and in stores XX stores year, of Other sales growth finished

four operate stores and store also We in sales comparable rose modestly. UAE the

sales line sales XXXX, per This resulted to XXXX. Pacific which growth our In in sales productivity square was $X,XXX $X,XXX for productivity, Asia with footage. from foot the achieved $X,XXX and in region, from year, company up and for the foot Europe, Americas. operated By of we the stores, $X,XXX worldwide in terms X% increase square $X,XXX in sales to in per in square Japan, to the ranged the in approximately

in keep changes. in these levels vary, are dollars, calculated U.S. that so mind, currency the on productivity numbers based Now could

nine in stores. each all at one XX footage planning primarily Looking year, including X%. region, are at in stores, square Pacific, to and to close the continue currently least Americas many relocate existing Asia to an stores, least approximately increase coming and renovate of global expected in This equate we stores, is at the and open to two

at an overall we omnichannel Beyond looking increasingly stores, perspective. are

quarter will growth. that the were and be pleased than worldwide, on presence increased our We sales year, just a faster say with which optimizing focused Alessandro omnichannel slightly heard we capabilities. the e-commerce growth overall pace sales and You in at more

an I should periods quarter report XXXX, sales retail by accounted that the full store believe add that e-commerce company sales basis, comparable generated view the will also with operated of our sales, two not view, the indicates was on which sales sales X% beginning include past should worldwide only consistent combines Taking sales generated sales catalogs. with a for omnichannel of also years. omnichannel those our in web through we which XXXX, We non-retail complete sites performance, catalogs. for first but that presented with and

and performance. site visit to powerful product catalogs, our are and we for strongly customers serve several to information things in-store experience. as There that a regarding for are catalysts believe unique also Lastly, web still stores point our source out

internally and called First, category we Jewelry High, and as well should you shop that from new are one Jewelry now the Fine now into reporting the to previously parallel jewelry assortments, way for how Collections Fashion note our reflecting customers we jewelry. a reported the Jewelry perspective, Solitaire that are categories combining as analyzing

category, has Fine Jewelry Additionally, Engagement we been and reclassified category, Designer to within the previously the Jewelry designs Schlumberger, Solitaire into of the which category. Jean Jewelry was the changes made reported High, and no

the that see product report we can region with on sales SEC XX-K the by in morning. You filed presentation this Form category of new this

area, with at it the progressed. XXXX, as year, year, fourth in on posted as collection gave accessories growth designer finished year, Looking and sales the the increased but when Collections the old lower our our throughout it watches, with were year new category improving we strong in and The in it's over quarter, note. the launched category quarter sales a trends the home jewelry or way, of in category Jewelry a Jewelry the the quarter. year than with of pleased and course sales sales way increase collection improvement jewelry boost that and were fourth strong very the growth with Sales was and a year, year the the full we the Engagement the fractional in finished the new pleased XXXX. were and to Complementing

a innovation, active Speaking of year. it was relatively

as In collection, we Collections. in collection, and addition of and and We to T, our Home the Tiffany launched great existing product designs jewelry to of priorities with introduced Keys introduced Tiffany Return rate new accelerate But Jewelry the our within the Collections, Tiffany fragrance to one as is introductions. the new signature we watch Metro and such said the collection, Accessories the added hardware strategic earlier, success. Tiffany Alessandro

of will on and sheet XXXX certainly for the performance pleased Erceg income focused we during in balance newness perspective, diamonds, call soon a now and our new hope of geographical the statement, you to understanding some As there good year. years, the and our a rest product a sales from turn on many I the am Mark I the other to one comments guidance. and will jewelry example, over be now have first our launch platinum collection,

Mark Erceg

an good and Mark year. interesting a financial From Thanks everyone. morning XXXX standpoint, was

were sales On clearly hand, our one below comparable the long target. is term growth store flat, which

On the on earnings years, per in due share charges, declined, charges were up a other excluding XX%. per net hand, while basis, earnings net tax to pro forma both share

flow, from for $XXX very million $XXX flow and cash million free also with We generated strong year. of operations of the flow cash cash

returned by dividends, per at an repurchase flow we of quarterly of of Finally, XX% and amounts of our generation through in the reflected we to shareholders in $XX $XX the cash share. our of certainly significant price dividend XXXX where capital stock, strong million form The earnings. increased average

partly also of addition, more but In an to effective payables, tied and lower. increase in the of the timing were accounts payments tax in inventory payable quarter, lastly, to was purchases management fourth

four time Now expense forma the the job was we again, a years. fact full versus cost, XXXX, these year in for better results first, for that of much prior percentage things; in by a managing SG&A virtually excluding several first me year, charges doing are as as evidenced pro a flat the tell on sales, basis,

support although to and be believe upside of the a during we Tiffany support sales should as investing tremendous we brand, Second, percentage which more slightly XXXX, increased we potential. amplify has marketing

guidance are preliminary these increase total rates, now, investment recent drive short Third, equivalents year reform, return our sales, laid fact solid cash, finished and growth online of higher achieved, in excluding Being Ultimately, having long of only margins, and mindful the to and also debt, term execute coming short is that to higher the only sales, order of investments, goals long store stockholders at a we Alex and of strategic to the year, to be strength and basis, the total have we cash disclosed which long in objective our our equity, term earnings. customer financial priorities conversion cash visits our if comparable out, both has increase term shareholders. we term we billion maintaining the had investing will properly U.S. continue business, sustainable the for in January. to back and $X.X and representing expand in with term grow on drive and and impact tax potential XX%

to a to non-GAAP and Specifically, pre-tax last be down last increase over earnings, to taking slightly into XXXX tax rate. lower year's we expect year, earnings account net flat from after earnings

pro was presentation. sales just Importantly, With minutes reform, per XXXX sustained earnings few we merchandising, per in that and GAAP rate single earnings results, on the impacting earnings. several acknowledge technology, share. needed of take the statutory store as in are to is items; by when were a primarily in this, during earnings which to also sales digit growth. which visual to a XX%, in fourth on investments quarter share The flat, and the or significant during store share share transition basis, reported the of saying expect tax tax as all well corporate make reduced comparable but let's three comprised of XXXX XX% planning subsidiaries, per of which complexities, communications, drove investments that while digital digit growth generate charge per added charge tax forma corporate foreign discuss a onetime high to we store our sales marketing we undistributed $XX $X.XX also comparable we U.S. tax we grew and are future year, our are $X.XX million and a XXXX, mid-single first, believe new an These improvement both said, ultimately

of deferred which resulted rate $X.XX reflect tax required a carrying share. million of were $XX assets, to XX%, tax to we charge or per in value Second, statutory our of the remeasure new the

our we share but benefit a the January rate -- Finally, respect effect million one the will since or for year in an U.S. and bit having effect payment month. made XX, the period XXXX over for beyond, went tax, in tax statutory in more The XXXX. from a $X in tax into law per expected lower eight realized fiscal be tax require transition new the With January to implications installments year $X.XX a X will tax cash XXXX explanation. beginning likely ended

may For enactment. the tax many companies, turns, in U.S. in no domestic the immediately particularly change those quick little statements, the realized and a post inventory rate effect corporate of of to financial manufacturing be

expect long However, the have U.S. the the because phasing the affiliates our the our jewelry This in because sell sale the on affiliates, about purposes, to international intercompany intercompany merchandise, is international from pay we affiliates be intercompany U.S. by profit sell realize merchandise for the the is turns, associated statutory that before inventory a is, statutory affiliates rate. our the they we of recognized The when of portion from on the GAAP sold in, benefit we it the global to relatively expense to tax see when our lower requires of our manufacture we purchase deferred profit and historical sales our XX% the while a rate. large U.S., customers. and gradual tax full merchandise, from occurs, U.S. these that way tax will associated U.S. reflect until profit tax on intercompany the Prior to to global sale simple financial to think that it XXXX, the reporting

XXXX. understanding, high With affiliates overall a of As practical hand, not physically or of global in means are stepdown our sold. December an seeing the full items the reform, we somewhere rate in matter, we U.S. of XXXX in transit, until had on area, as expect realize of all tax a before tax were further the this XXXX rate in will XX% effective individual benefit this XX,

like P&L, with there of point the handful to things just is balance out. we'd to of Now a XXXX respect the

SG&A single making, is product digit balance growth, XXXX growth. assuming sales diamond digit growth, a be exceed pricing, expect coming worldwide the price We and have our we costs, due will come increase. the with Gross sales expected expand, due from expense But to sales margin plan majority mid should we from including built to lower investments financial low of which somewhat the single to to mix growth. input comparable

So in, in decline our a guidance operating earnings implies sales all in XXXX. and margin

levels and do However, of and operating resume preclude healthy in over assuming meaningfully are to XXXX higher term. we improving is have operating the spending from once long expansion which annualized, its any Tiffany SG&A not believe and beyond, said margin before, expect margin would we structural growth, to there reiterate sales what barrier, we

the key may we is write-off took investing of we projects One platforms. are pleased when as IT and systems charge we is improve recall, to million towards certain associated foundational geographic first you market, that with replatforming. XXXX information other multiyear in Today, new up completed, our A information efforts part that our line we developmental and be development the technology a our we $XX our are report ago, expected with to behind, our stood work plan, recently of of expenses business continue Interest capabilities. as to key a omnichannel should platform, rollout to dramatically which roughly levels. year

changes to All on excluding effect the per to recent earnings taxes, to this, down tax from diluted pro law, per would the slightly being share expected in be net basis. share XXXX of earnings forma flat XXXX's a corporate of U.S. result including

effect expect a that, investment somewhere between year-over-year share. a in balance we some in $X.XX tax increase after the quarter full somewhere ago, overall Within and high the should after we factoring earnings the expect earnings earnings be per growth up the rate, on benefit which XXs, to spending versus through increased the have However, $X.XX XXXX net of of to year over to first year. in effective passing diluted of to phasing

the of projecting late taxes prior largely approximately balance anticipate and to Based in flow million earnings, in inventory sales. sheet, invest and X% the XXXX. cash flow spending of for timing planning of for lower in of than from as certain $XXX and in are in line approximately growth, free X% the cash on our sales with operations payables we we between year, XXXX, forecast continuing are million CapEx more growth categories, in We net due XXXX, and $XXX is which

moderate despite to cash summary, share earnings in So delivered per results continue in cash shareholders. form top pro to solid XXXX, line a performance increase return in and we our growth, strong

brand term Our mid-single believe as declaration, long shareholders, returns of and activities; strategic the sheet are managing to have will as strong, clear and of the year this executing balance are digit making business generate growth committed now by we a against, sustainable, we priorities, and and to turn clear high for that are going benefit our back term. which share those the sales we to annually drive old to we we remains well I what set over solid investing requires single fund be the long digit to call earnings per Mark. the XXX

Mark Aaron

and answer Well I we can your to thanks the call so turn back questions. the Mark And will now operator, Alessandro.

Operator

[Operator Instructions].

We Research. David will Edge with Consumer first go from Schick

David Schick

how you. from Thank fourth the Good and movement a feel Year is just mid-February impact you morning. first quick January, Hi. quarter My late about question any numbers? Chinese question New into on of

Alessandro Bogliolo

know, you New Well, compared thank you, David year. Well to as previous your Year for bit the question. all Chinese little a shifted

shifting we So retail the calendar, these effect. but there on this year, a at the to every our neutralize in this was effects actually, [ph] slight we is had sales, way so try effect results, look of

David Schick

Okay.

regional XQ? So not you affect feel, for it reported comp the did

Alessandro Bogliolo

[indiscernible].

David Schick

of are you pieces much out is, six laying is, question there a talking -- second the thanks picture about, know, then lot so Okay. question with bigger the for your strategic is And to the and sort what of moving a planning. of pieces you

the the merchandising the an Some acceleration around in-store of undoing in as things or revenue for been of much how that whether at is much in going of near adding projects initiatives, guess, so year of have on the I call, presentation, work. which IT, drivers amplification that is in different say of or were are all sense how an digital, go older already on, an us a or started, versus it's a costs longer? for or term certainly unwind some the

Alessandro Bogliolo

was we it's really ago, about but to is a about see cutting, question about write-off okay, in about honestly, unwinding, really your technology. or ago, what years guess, but maybe I investments had Well years But not I that our refers honestly, certain IT building. restructuring some few

I very the we product it the can but come offering, strong the think it is a comes committed future that, honestly to you to really have had after think aspects the when we barriers our the newness, when but in there, technology, the more for are business, it really build more of call six distinctive to we comes with to job, and growth. newness months a infrastructure, I lot product that healthy. offering, brand Likewise,

problems, to So basis. it's but not about a actually curing on build very solid

David Schick

Thank you. Very helpful.

Operator

We will Citi. Paul go go to Lejuez next with

Paul Lejuez

thanks guys. Hey,

how line relaunch much on learned, XQ I in helped that Thanks. the fourth of am next Home, comps? the of did of line? On work what's you what you quarter, that And and of that can product curious what if you business share comp performance

Alessandro Bogliolo

meaningful Actually, with in of been for and that Krakoff, introduced Home Sure. price. been was meaningful it and category, because for test the leadership that your a has Reed you has has Thank me, been substantial very it us, newness Accessories for questions. product

that when and retrospect, different, a makes truly see that new, measure the And all, customers, and important something the in we of nice it we do the a actually because accelerating innovative can reaction pleased was the very confident and it has because me about innovation. react me, extremely this are because even test of in in was course, is double category, that and consumers, sales, of First positive consumer digit growth more meaningful with. of can we pace generated But innovation, to important for for which of is we what way. is positive

is the and customers between connection the So is brand solid. and there

Paul Lejuez

out Anything wasn't particular a being versus driver maybe of as that within as if the stood sales, successful? line, it big

Alessandro Bogliolo

-- mean, of to the but category, ranges that to well, Home crystals many. from a mix I we referring to Accessories; category is Always items, to call reality it's one it gifts it in a silver and different that very because

by success, been it has honestly, being driven overall not sub-category. it So is a an particular

overall was across it the say, I positive So categories. will

Paul Lejuez

Okay. Thank luck. you Good guy.

Alessandro Bogliolo

Thank you.

Operator

with go will next Nomura. Siegel We Simeon to

Simeon Siegel

Thanks. color -- about current just Recognizing can deceleration more January a you are looking it store like you pop-ups, what remodels compare, like difficult for your now strategy? a broadly, any seems Alessandro, the rather than relocations, then? And more talk in opened on Good past. up could off looks you then provide from morning. You have successfully trends

about any your change to thinking Thanks. past? the how versus So you are stores

Alessandro Bogliolo

of are for brand, can the stores; forget that actually, are the what going Thank for the Well because stores, non-physical traffic about not and is really Yes. huge. you course, the our physical say stores question. stores where sites, customers really me, mean, stores, experience relevant also of feel web entire our is I the is forward, where let's when the the the I but the place,

So doesn't stores attention number key going of the one for forward, and of that. areas which of the us mean not increase about stores, investment definitely it's the are to dramatically,

of But Our story is what stores. for we a like-for-like. story dramatically and in to to want and be experience the is customers want modernize, improve our

was make presentations, our in increasing mentioned, we in about that, we on the order and we why our to want of for merchandising, areas and customers. this in experience investments difference, the are such working because to also visual of a I benefit the icons finance think is very about newness clear this store Mark and So stores, need as that, better

Simeon Siegel

Thank you.

Alessandro Bogliolo

you. Thank

Operator

with Vasilescu We will next go Macquarie. to Laurent

Laurent Vasilescu

color integration thoughts the beyond of the XX-K, for provide how appreciated? this integration, be vertical supply of XX% produced evolve chain? is this on Thanks morning's I jewelry your According you think and to vertical Can Any year internally. still regarding it taking morning. should my question. Good would updated

Alessandro Bogliolo

really it Laurent because very-very not it, best-in-class marketing when proud Tiffany of I you luxury really your only that of supply chain, Thank manufacturing to believe is comes craftsmanship, I because selling our to a but skills, in and question, prototyping products. our also for am and the

all, XX% way to So of us when XX%, of more And where be I comes the in-house, to made are are company, that because vertically really manufactured, the allows to is so, our several integrated products a ratio, capacity. we sites even which but right, But making, make are about is think jewelry of depends is a this company, we year, cost in strength we master the independent of you the first this and the substantial, it's it to, product it. U.S. on the in and true, jewelry in

Now, internal just to that XXX% is make I would one-third kind but production, say, would our the two-third, ratio. too because of system let's go rigid, of very-very healthy never a XX-XX,

specific differently Tiffany, from for jewelers integration diamonds. vertical in more is even our other global Now

and internal a why matter a a to makes for the it but diamonds a comes It's only XXX setting, stands cut we this when in one, brand is really to set considered it's market. of Now for was strength, sales but is ago diamond, real this years diamonds, important of we rightfully the fact that difference; have the the matter we a and point so, size, the a matter in that is reasons, that rough because polish this master this of is expertise, for one leadership. means an what it not and legacy, the the category, brand that of of course, diamonds, great capabilities me, of because of volumes and Tiffany and Tiffany craftmanship of is designed our

Simeon Siegel

payable And willing that. management more payables you prepared XXXX? for flow metrics around outstanding? out we tied the share a inventory Should there to you cash called around days working purchases. generation target inventory opportunities Thank strong as expect capital further turns remarks follow-up, of any Are in effective to and and are

Mark Erceg

question. Yeah. It's a great

we One that architecture putting been are information in have we things and of the the platforms new place. about, is talking

that is much things One across the pool. payable spend visibility bring our will us, better for of that

and don't allow us active in currently to XX,XXX have manage systems class appropriately. that have we suppliers, to best We

capital, You investments may it more see electronic working of that require a and more types better doing us higher may the payment capturing discount driving, side, as which initiatives out will make make, all will inventory. to we choose we of things to with us levels a fund as slightly innovation, much those other getting which result working generate product the will us receipt, additional will of company, are terms, capital positive drill we efficient then on that help

Mark Aaron

at just somewhat well are reason that was just that, a I did of add forecasting the mention we let me also will we flow that of there on Laurent, the as lower And issue free some that's for timing that and the add, cash XXXX. end quarter,

more are So but timing some there was XXXX. that, XXXX late effective getting yes, certainly into on efficient we and shift from

Laurent Vasilescu

Thank you and best of luck.

Operator

We America. will go next to Bank Lorraine of with Hutchinson

Lorraine Hutchinson

of the you before? has or it opportunities, morning. be you channels targeted have not the other sales that business, categories Good you. found brand Thank as review pockets Alessandro, any

Alessandro Bogliolo

for question. Thank you, Lorraine, your

of of the As majority from know, we large jewelry. revenues all Tiffany is sales

your the absolute in is mean, and history ways; Now have I the look what two would I even that world, Mr. in was a for in an that jewelry. category having century, if must. it's go answer and important back a something It's -- priority. not at for question jeweler let's is in very we first, is much is Tiffany, devoted watches, me, this, so where brand, interested XXth the any we to

putting think a truly has of category, know, especially, to is watches this the as in comments position development just go deserves Accessories watches. some it's slow, that path, believe, one. this category the I important and lot to brand mean, is determined I all achieve efforts Home a equally world where the in I order women's before, but we Then, that a an perfectly through know, our It's and profile. fragrances, XXXX. keep is world there and values has last license, is very the Tiffany, special our fragrance. And competitive should launch product opinion, where Tiffany, the we quarter in customer's for my it's is last a our on started advantage from in very of a the and I as important in we redoing been also year you that that exploiting but of poetic with that mentioned are a and it, So in Tiffany area, new growth -- have absolutely and of we line We we it. are with that as where is category, of

three, say, forward. focused do, going we I me So let lot and also we these think are of jewelry, to categories have great satisfaction outside but totally will a where are on,

in price I would of of you, points, is about the that the to the jewelry talk that the the see jewelry that, segments if do jewelry. of capabilities for you we When go fruit, the of has jewelry has leading a XXX is usage to different diverse all and which XX% for where is a hanging that lower other lot we very company that. I operate. a opportunities back and in tell years, Now I been want, And group categories, business, subcategories

are So very-very or side. the considering short from confident this. different I What of businesses very kind not that also medium honestly am diversifications in on in term, we are

Lorraine Hutchinson

become business, And of larger of become part then, a as some of your categories wholesale bigger revenue the portions these does mix?

Alessandro Bogliolo

Well natural where the is the with obviously the fragrances, wholesale exception business model. of

For Tiffany the only of a other is purchased think key directly a mono-brand the one that products strengths the environment. categories, having of fact of I in those fact that and stores, powerful, very the that of fleet be Tiffany, on can is

luxury would less enormous is stick strength, that to of I an is very-very a think, I and Tiffany than handful brands. definitely of brands, to those, that. one few, limited is

Lorraine Hutchinson

you. Thank

Alessandro Bogliolo

you. Thank

Operator

to next go HSBC. will with Erwan Rambourg We

Erwan Rambourg

the and sort gentlemen. in Yes of Alessandro. been the the has dichotomy then hi, is and good had view one historically, brand helicopter questions; in Thanks between for sort more There of future. lot a I affordability Q&A today for end. three higher morning a

where benefit within positioning future? a but obviously had type about jeweler, clear for am is to for the wondering, competitive affordable I goods jewelry Mark, product on very for in wondering in tax have come. a could, bit have maybe thirdly, mention then you XXXX you launch How you while goods between that goods. XXXX? for exit are where what going? shipped on you question get do In a push worked down, And of quite the an I that I because worked that you also important do maybe this if XXX% in there, see how for have platform high-end background, you XXXX. you of a year. peers? taking to year do an and of consumer for fast rate with there? come moving the January am basically pipeline to rate a the of the a just just product the question, dichotomy in the it's new technical sorry ideal of European exuberant or line a more think where would if the you the Tiffany are have the tax products the some Secondly, or more you first Roman Thank mind think where late only products situation, Whether of about had you and was new your You rate in you. have sort

Alessandro Bogliolo

first jokes, one the range. why has centuries, Erwan was from dichotomy the Well, experience general, products of extremes the having of of high customers of a great you in offering now, product I since capabilities range. Tiffany that questions. But think hired probably was and this very in the of than the apart both reasons two has almost price -- brand quality women, essentially more job, the for your Thank are for question, of wide a thing, all, on on because first this this I is

million. -- can $XX,XXX, $X Also very we it's to top, I on is structured, expensive. are consider $X then I The about, from, not silver in this an $XXX,XXX, say million, a the and for well I mean, bifurcated million, the $XXX, $XX,XXX, something, not very very Now and example, $X,XXX, is think XXX up cheap, million, bracelet $X,XXX, Tiffany in say, we something That's let $X,XXX, that offer $X if offer famous because starting blessing. me $X case. at $XX,XXX,

of of price for this in the a At end of of they but and a box it's very of can the products kind customers, in different modeled, the because all the analyze we shop extremely at as the the end are person, ranges, same I up adorning women, that jewelry ends today. way a day, day, woman. that products, the well So different all that stratified especially is it find offer, these and

reach of brand. real is the that me, a So for

the that the points, innovation and and of point different to keep price offer. is, diverse balanced different the to in Now have be also real segments

points, a a especially the As platinum in product offer jewelry is first we collection we price the new absolutely is have, job after as that are verge and very true, collection, [ph]. now, that its the Officer, and jewelry Chief across very year addictive market, different diamonds. second but kind really a yes, thrilled nice going you Artistic Is think one to point, the we present surprise is for be would to in are is for I of on

So very it. about we confident are

to about it excited look really soon. forward launch we very are it, and very We

Mark Aaron

of XX% that, derived in earned additional a a income and materials foreign other that is still provisions full fully believe there a mid-XXs. And will the need and branch lot in the there the still tax a relates to the to that on whole on income intangible operations U.S., relative with going understanding bunch relates whether of the is whether or clarified, are them. haven't rate, still it We end been basis, it of of things that published lot then moving because somewhere the up parts, regulations our

Erwan Rambourg

a help, for your lot clear. Very gentlemen. Thanks Thanks.

Operator

go to Greenberger Stanley. Kimberly next with Morgan will We

Kimberly Greenberger

capabilities inventory Great. investments back am wondering, management comments new sort improved us margin, better any some share long on I about term from about then broadly to more and care IT Thank to of or investment. and targets much. you morning. initial margin systems? lastly, that on your step of so in looking talk But referred term out your follow-up wanted with expectations new today? operating for I longer you you you regarding thoughts you IT in these system can investments if you Thank meaningful just Good expecting the IT from you. improvement platforms, have Mark, talked do the in And are you to

Mark Erceg

question. the for you Thank

replatforming, precious to we around one run us for by currently bit of the metals to for excited doing global regard. and where a very system, going duties, us the are we items, challenge to order complexity is with So given the distribution It's ship given network, to which the going is we we the allow fact effectively information requirements of which are global ship us, in the management a gemstones. this and give that what world, respect one

We are consolidate be financial also instances. our able going to to

running currently the dozen around to all down we two financial over world, We to that are going instances able to one. consolidate be are

of could of platforms imagine that shared You drive services types what other will a lot do can that and for efficiencies.

procurement and invoicing it, back, because and global a with doing We been But let indirect fabulous, had have haven't indirect fact, them doing payments. they in system back talked procurement of been in the suppliers, hand let lot XXXX. The about one journey do aggregate they began tied generating across procurement. team electronic have to our all behind let business. has We of capture them a their savings receipting, them aspects discount

is one able element so big the And it. that And be have. the will probably that's biggest will really, then to we be, of omnichannel what capabilities another

have network shipment orders to to from We seamless will fulfillment. a

with elements as will focus able enhanced, order in on technology will with this online first, mobile as be is and will and all store. come I significantly of digital and to concerned. really You be is it, a also that mobile kind additional capabilities mean, our pickup far along that

Kimberly Greenberger

And then long margin term targets, just the Mark?

Mark Erceg

past get margin or our past, we structurally, margin, Look, yes. no the digital expand be communications, operating going and significant to the are indicated, In able some be at won't But investments, presentation. we point all, in that we some course, technology, able see visual at in why that level, and we store reason had we the get the in operating XXs low beyond. have back future, to merchandising, as year to we in confident to are making be XXXX, marketing going Of Alex continue to to are we so. after reset

Kimberly Greenberger

Great. Thank you so much.

Operator

We will with Yruma Capital next KeyBanc Markets. to go Ed

Ed Yruma

questions. Hi, good And morning. my taking thanks for

existing as big I know I recently. your both then do Alessandro, business narrowed with the and But certainly But kind owned sales big different. guess, and bit been luxury guess Thank And broader you Net-A-Porter, think growth parties? big than third is some gap slower about e-com, have gap an question growth or you. a mix Just versus obviously do in geography European an select any of basis sales growth any takeaway? on to takeaway why of picture has a relationship peers we has how second, the peers? I through

Alessandro Bogliolo

between and brands, very we Thank limited, and the for your jewelers. there question. some you gap right, a years, been jewelers at Yes, our absolutely the that few one you are look has not European luxury of growth, if and last

line structural mean, reason and why months growing, Honestly, my like because past say, tell had players. of been the can has as I have we I is have to also, newness the we probably in would my least that, you Tiffany you in the was is that, years. with The that, this assessment point few make difference. nothing to not was, newness future, in the there in one that can for concern, distinctive at first after other is that nothing really that obviously six would I the tell that, not I job, area says a as structural. Now

has little been during of brand the period the a bit last that, think understated time. I

it the up just more and can with on increase nothing are bigger think a and that that the impact we things So intensively, but and we really well, wrong, do get can doing was faster, market. I we

broken as there fix. is past to opportunity future, but a the for nothing is okay, the I So past, marvelous see -- honestly, see that I the because really

there and wide contrary, that. been is the occupy there, are a space to left that we ready On has

second your e-commerce. question about for Now

I business Tiffany other was and a all, quarter the own have billion on Tiffany has our a the of site. one of in of was been that in when is pioneer proof web in fence, the I and first remember, e-commerce, that Now, we pioneers. really of e-commerce of the side

talking So already in to substantial we repeat said. don't what are the industry. really we is about substantial, want I something that

question about business in Net-A-Porter. we grow, are We your and about committed to make are other that yes, platforms,

we price platforms adequate are know, and Net-A-Porter, others, any brick for fast prejudice We among don't a towards And a world, are to and are example, of we the it's when at world because to is comes looking have -- we that have our it a platforms, mortar, proper changing environment customers pace. as, very at carefully case controlled far be as we a as consistent communications. very marketing as which all that platforms, integrity, that where luxury online, purchase are it's

for it these totally and So closely. looking criterias us, the at are open

Ed Yruma

much. you very Thank

Alessandro Bogliolo

Thanks Ed.

Operator

Chen We next Oliver will Company. go to Cowen with and

Oliver Chen

and engagement experience, Alessandro, you a to on question, store, what look Hi. related ahead and and the the the Thank human innovation that just with convenience does how the drive that consummate capital as management of and in digital, And brands? chain ensure in mean that as experience of should the effective engagement offering what and evolution in-store luxury with the be supply as side in you are you. your of engagement of thoughts you you elevated where get intersect the in as you. the terms future and that's of and is working and how customer an inventory to will well store, net well? omnichannel the can digital, Thank future

Alessandro Bogliolo

have But growth. about the offer kinds of in and not of and this, they is such huge a of the Well you. is achieve of the Thank everything, surprise have day, to comparable point the course, customers, will end facets result at for as of our as stores, all surprise luxury our meaningful our of really Customers sales aim a nowadays we the customers. luxury.

and of attention I bring more in especially frequent, think lot innovation a Tiffany through all newness, meaningful terms can but in frequent distinctive innovation, categories.

even little more Now only advertising we because customer even she in and the stores. it's sees, take consumers different that millennials. and anymore are bit of things goes results into say, all are why the millennials, physical digital why media or to we there the is with experience; to baby are more fluid mean, one more I products the presentation that very-very store, we our will lands, anymore. there a together if a is merchandising customer the and these in invest changing will the tiffany.com pattern But this from this he the no want that the longer, This in nowadays, generation, of omnichannel silos boomers between no so it's of are mind for is siloses the or not we purchase, another of my also [ph] where investing,

Less in positioning for is underline, tact that a that is would position, the I So absolutely brands of the always the what good and the Tiffany future, is been less because I brand. more compared very has in more, open of and inclusive, this, mean, and about other innovation. or more to definitely formal, a joyful Tiffany like all to -- experience. set to

sure, consumers. For very for relevant younger

we So are in special set order a succeed in really kind challenge. of to in place, this

Oliver Chen

in thoughts convenience any with networks has digital a the about facilitate as on supply accuracy factor. well chain; And because salespeople thinking to revolutionizing to as lot enabling the do Okay. placement, of the really inventory non-linear

digital So you what of are up supreme how with that like, be to there journey, convenience match will in in where and thoughts terms that are offering on you new customers? will

Mark Erceg

a elements information procurement that modules. order pay is, to think I that as that along that the call base model, Yeah. call with about bunch our What go management it, on would we there of source financial offer platforming, the that module, call is the

which kinds our tools and to doing replatforming, will us hub, and all also digital allow put additional to endeavoring also top then data our overlays are a build merchandising tools. a of of analytical we pricing We are on

we a an be quarter the we it is going and to a relates a of systems are do capabilities, efficiently, capabilities all trove treasure to to bringing data that e-com. enhanced closer to are additional areas. do to on fact lot services complete effectively So of going to that but customers, doing today, to a and in more allow our we is mine we better this it, work business of getting dollars us place. talked huge clienteling. of get able are there, our we the our Alex across even We of we of going There as all once forward, billion enhance IT suite are of have that's job customer about

a So upside those we regards. of all lot think in we of have

Oliver Chen

Okay.

both, terms of Alessandro, to in diagnosis terms from brand Just purchases the carries you your and your that what would range, on opportunities self angle, just love lastly, versus of gifting, in want do? thoughts

Alessandro Bogliolo

self for it's magic a wants is whoever. as customer make friend Well of to a somebody purchase, the a wants for of this to brand is that brand well other around obvious different and cases, as for gift who significant something that many me a a it's just because brand, is a real world. not This a blessing or all brand that relevant or suits these this jewelers

your in because for will makes somebody it web -- the sustained purchase. for find is these initiatives in the Mark to referring is you a when was want a or our site, gift do you you different more that that also this it's Now the -- area when to do tiffany.com a to go you on to purchase for path, easier be advantage, competitive yourselves, it's clearly important, must buy digitally; and before,

So for it, on that a believe advantage I are Tiffany. definitely we big is and truly

Oliver Chen

you best and regards. Thank

Mark Aaron

And could just just a still to to one if please interest Thanks. time, these questions. I sure of and in limit number I we ask yourself want multipart add, the people am questions? question have who not Could of you

Operator

next We Oppenheimer. Brian to with will Nagel go

Brian Nagel

the thank Thank color, taking morning. questions. for good for all you Hi, you

you. month probably so part holiday, for talk initiatives extent comp quarter benefits term, will the about question, a explains here, guidance mid-January. the seems to XXXX? a be slowdown XXXX. related what question on guidance or I that of are the very in short into all -- seem Thank first the To some But of term, in and fourth sales one to ask of the second since the parts. have you What what a in I hit it's lot Then now to of out longer financially guess initiatives off, you weighed So two month recognizing January. we the -- guide key these you obviously the think potential really;

Mark Erceg

a questions. think set I great of it's

of in to quarter, went Throughout we we seen down the that in course went comp one want XXXX, I down that mid-single were to are sure stores, We We second. down and respect XXXX we we with So the we one. have just make finished were digits. first clear. comps our strength were the two then the and plus flat, to

period we at feeling long end that month, making particularly of So Chinese the go, of way what day, direction, to New to kind the there are still progress. right concerned are to clearly which some not but the moving the in overly we extent. one a have we and be about we from We was flopped might the Year, next one are when are

to the at feel So improved. are which and strengthening, we over that again sequentially, we look want have quarters, things we

Mark Aaron

have did of January comparison. we was tougher bit so a And last strong year, a it a

Mark Erceg

Correct.

through would as far is simple think As guidance, or not the I answer whether baked there yes. I say, these XXXX that initiatives the already of are some

think are been of which now, starting But initiatives benefits. to a they are benefits factored We increase some XXXX. are time, into number there we while a will yes, working have meaningful these for on We provide those over about. excited and

Brian Nagel

Thank very Got you much. it.

Operator

We Omar next ISI. to with Saad will go Evercore

Omar Saad

question. Thank my you taking for

XXXX, are we guys. you be is at expect that to this going contributor you a mid should January? Thank rate comp to the comp the bit us where e-com, Asia follow-up; you kind including like to do it think the saw going growth holiday to biggest singles how Just most the seems the then low of a drop-off, And help now about comp, what's of little was trends for guidance, of a much in forward? there, area think the overall retailers as point, as about that

Mark Aaron

in Asia, some no like said was Yeah Chinese New I We just it certainly There shift looking will the the off. Omar, that, say of in terms big dropped from effect. there effect was Year.

there and sales down is that also point in out of in certainly season unusual fourth holiday wholesale of to the quarter. especially slowing have really But from little nothing Asia-Pacific in lot terms from noted AsiaPac the the and to bit full be region, month-to-month Korea, a a We choppy quarter-to-quarter. technically can

Mark Erceg

And prepared do think e-com, expect remarks. I base then shared e-com with respect to business our XXXX, to we during his faster which Mark in grow than

Omar Saad

Great. Thank you Alessandro. guys. Welcome

Alessandro Bogliolo

you. Thank

Operator

Michael to We Suisse. will with go next Binetti Credit

Michael Binetti

of that on Hey how look my you and just maybe it more of something how guys the economics for And at on my but stores, you the about ask be been answered, I that guys. Thanks. and along going strategy? here. that questions some impacts a Thanks see taking I might lot out the Good P&L? guys have could the just on rolling question Is touch the morning. economics touchpoints maybe forward, could -- curious of pop-up

Alessandro Bogliolo

Thank question. Yes, and your last you, few year in to the quarter some couple of a we Michael, City, stores, York last them New open were Canada. excited pop-up in for of a also very in

year, Tokyo. for the During we few also had weeks in one

reaction is the up to and these have customers So stores link if me all usual with really brand this comes of also way a the it the and And sense the consumers is with to and first it not lose for factor been top that, a been of in is this connect measure out nothing doing main but respect. very say, all, effective the to that When respect, I material, to see especially, they purpose skin, all in that the way of there. financially it positive is profitable, it to really didn't money this in have not have of a financials, exercise. -- we is the is

Let kind is they me it the say, things of self-financed of testing customers. activities, work new but major with are

Michael Binetti

very Thank you much.

Alessandro Bogliolo

Thank you.

Operator

Telsey Advisory Dana next with will go to Group. We Telsey

Dana Telsey

Good welcome morning Alessandro. and

and you two coming accelerated Tiffany's how of what businesses? differences your similarities between and are and background between Thank your and the Given the Bulgari, from you. there assessment Are Bulgari? enhanced similarities

Alessandro Bogliolo

Well are many. the similarities

what And -- course, two most founded I business wonderful of relies jewelry, global the jewelry. are two brands on brands. respectful very on really Two that brands. and about talk Of think and where we

traditionally, more more said person. important, having everybody for way the that directly, I and Bulgari so, as the job, luxury but older and Now equal own brand. Luxury as a understated, than versus is space. more is joyful to because what days, the the six on is in opportunity this people. that in after joyful not Tiffany, these is is But in also think Tiffany is factor are changes is brand, DNA for in good difference bad the very personality. typical younger, so, personality, great predominantly luxury experience changing. very of understated, Tiffany because solid, for much months this the with Bulgari, of of the a experience richer brand longer is In luxury is or going see is being personality me the longer the And I and luxury is is this no is is, younger, like a very the its There this has formality, line a no

new best the exciting, this audience, professional future personality, And respect, challenge, a of cost really define company. of of to Now financially for luxury its I is think a to as and is I DNA, I set the think its of because as so both meaningful large this is that as because Tiffany, well think luxury. personally in

Dana Telsey

you. Thank

Alessandro Bogliolo

you. Thank

Operator

next Company. will with Rick Needham go We and Patel to

Rick Patel

with of and about to how different do more question. everyone a are that, year? You job, some last increase you about hoping channels? a the you morning approach, versus to and thanks more think the ambassadors. more marketing was taking Thank doing you. provide increase digital partnering the just taking for on your When you be this this traditional side, could color going Thank between are we the creative you. done the we think Good plans and year, I really year on nice over have emphasis

Alessandro Bogliolo

that surprise Rick. you, before, said our Thank Well we customers. want to I

we not that that did will successful. was year, anything we So last repeat

launch good very was of it example, launch, For HardWear the and successful. was a it

We the are pleased business But of with in it. are we surprise.

to in way. surprise have list a different for -- customers we a long of projects year, this So And

Mark Aaron

will It surprise too. you

Alessandro Bogliolo

related about in as very will marketing, next new forward. icons. we were really, icons, start am to important, look the to as well few months, our seeing lot a I But is and really before, that talking we of next launch activities from -- the you this And starting referring the --

sustained icons, throughout together about jewelry, that it's with new high we our the exciting lot the of about So initiatives. with product, marketing but a year, it's

This the marketing is all side, investment already be more on leading All the our and trend is of -- digital, them brands, years Tiffany of media. also will rather a surely of print two since is the digital now, most and than traditional is that.

Rick Patel

Look to Good seeing you. luck. forward

Alessandro Bogliolo

you. Thank

Operator

to with Fargo. next got Ike will Wells We Boruchow

Tom Nikic

HardWear and that vault product good classic have Tiffany of sort This you, is of new platforms, while very this sort wanted ask Hey, on also rate such for some And taking Tiffany you launched, this sort obviously balance as over and for new classic initiative you accelerate but with Nikic last style? of classic also introductions, maintaining you our pace morning the about that I styles product of of and Tom T, accelerating of Thanks do you collections. you have couple Thanks. years spoke guess, of everyone. new success how question. to products the have had actually I Ike. the to

Alessandro Bogliolo

was the had think York the your when I about Thank it that. store, the Tiffany at you opened exactly Times but new don't XXth a talking equivalent time am a in I big the remember day I New for Square, question. the store, and Union or newspaper, century, the year, the

a Tiffany new New true York, of to palace there is Now Well that jewels. in statement through has been centuries.

of and mix under So very as room, preferences, Tiffany this roof have of design palace consumers is of the to really, that offer, the it' needed occasions To jewels, lines, way usage. today's wearing for lines, there Not covers different like that wide T different lines, the today's or solitaire HardWear of are by diamond, classic for all or edgy women. mention, to jewelry, Victoria facets more jewelry of these example. example, more of a all

in ago. I our experience, predecessors order a full line complementary, more palace really XXX years to contradiction build So there, a all with see contrary, provide jewels the absolutely it's on to contrast the that a in or of don't than managed

Tom Nikic

right. All

Best Sounds good. luck of year. this

Alessandro Bogliolo

Thank you.

Operator

Kloppenburg to Research. Janet next with go will JJK We

Janet Kloppenburg

morning congratulations on everyone and Good good a holiday.

was two there talk Mark, envision about capture if bit little an on wondering perhaps commodity as about a category so you and hand, opportunity we was increases. I XXXX? little are it issues at for mix Just there? well margin for I Alessandro, and homes. could fiscal and XXXX gross talked price Thanks Engagement and if was opportunity, quick And and Engagement how to what I and if bit puts the questions; the you category the watches thinking takes market much. should share wondering, about potential talk you could be a pricing as you about some know

Alessandro Bogliolo

point, Well you. Diamond and Thank your first Jewelry. on touching Engagement

for several consumers things Now Tiffany stands mind the in of since generations.

Tiffany. love, the synonymous And is of sure, For is this equal important, the engagement, brand. is strength and definitely to and something is that very

the until love opportunity business that humanity will of area, a believe Now opportunity that is can new society, see there if Tiffany that love, in with that, Tiffany. we the love But our changing the changes, and The that of morals evolve world do is world brand is tremendous people is one there recently, a the and forever definitely business to be way changed exists. has has their people is the and because we changed. for way that express

past you Believe the a a to give in we YouTube. that, campaign. think category seen at I it, years, think already it the if direction. have something have has the little a on bit in know can more mean same recent don't otherwise few time, tangible, although you been first seen of I Engagement, Love I I very you find a indication reserves That it easily is of us good opportunity. a challenging But in

Mark Erceg

And question; we expand expect in gross real quickly XXXX. margin to do somewhat the on gross margin

lower will of many past a are a the large we have prices. believe brand, rough deriving that benefit been a we years, as power, time. expect health the power The diamond and there enjoyed, marketplace. and from bit diamond flat from still, do input costs. we We still a but have has do be we frankly more metals Over in that has significantly been believe metal roughly always aggressively increasingly brand We ourselves we think will expand pricing reassert little pricing lower year-over-year, over we

be we margin. to continue to able gross confident that And are we push will so

We ways also we are our confident other to structurally that doing to find are costs. address things

sales we We at the have a rate It to tools. a that workshop to achieve lot for and jewelry It past [indiscernible] that and to high able and have prototyping. about the have of of are also initiatives will to in will be analysis. while SG&A intent us the talked growth, leverage innovation related design innovation, just that, fast to end for some costing lower need of will primary drive additional is allow allow it allow the

will let We that to well. able us will forward, nimbly more as bring packages manage spec network be our production detailed and

Janet Kloppenburg

Thanks so much. Good luck.

Alessandro Bogliolo

you. Thank

Operator

We Guggenheim. will to go with Kevin Heenan next

Kevin Heenan

over for Bob what good I a Hi was we right Thanks. over XXXX, think, is Drbul. sales, of as longer the Kevin of for the the morning. XXXX we about few think be how the might might I into the any on able This if to sales years. follow-up just that on past and into the stepped percent term? just as to advertising, wanted company thoughts move as up a be, on change, level wondering, I percent

Alessandro Bogliolo

Thank you, Kevin.

typically X%, Now as you of is turnover. sales know, X.X% our total marketing

wouldn't it's is that over that marketing is a amount. Now percentage brands magic honestly, tell in whether to number. There that, substantial spend are the total magic the I not X.X% a believe more I there you, which than range. of is know sales.

media, obsession, effect on my traditional or can you lot to of sometimes, that that in in the than else. the money expense percentage customers; Now over the marketing because put something back kind a talking come really, me thing I way sales, is, important of don't honestly, and use the doing the you more money total and more to a for of of campaign effectiveness surprises sort the investment about most that same

Let me make an example.

the Blue Box of of me, great has been year, of For last Café. one opening the the campaigns

talked and We not actually opened that honestly huge But fantastic we was was that impressions, of media. a tool. mediums about Now speaking, a that number, marketing had café. the that

this become to beyond has the our ideas, marketing also open to am So is maybe, where to to complicated and to budget. and world customers, and teams more communicate the comes more trying above and the it when to challenging bearing, I really inspire way push more be but smart

Mark Aaron

important, much And Alessandro that. we Kevin, to increasingly well. I of as said, add terms in But would ties digital can really activities, sort to that and is versus it just marketing very certainly, customers PR which still don't versus it's that, well, disclose mix of a and digital all print combination question, social social resonate that is even Print all as of three. and our previous a with as but how

So it's a things. whole big combination of

question? Okay, next

Operator

Laura go Capital. next will We Champine with go to Loop

Laura Champine

Good morning and thanks for taking the question.

the because good. little the stores Just us, wanted to look color plan environment, store changes make already in on to more you pretty just a that

on specific So interested? are if to looking we be could are Thanks. very there, you you changes make

Alessandro Bogliolo

have all a old, some even of stores, but your fleet for XX stores question; new, has Thank look are seen kept wonderful say, are you, Yes and some appreciation of some they of definitely, them for I thank brand you this Tiffany stores. and years our to a level. less Honestly, them, XX, Laura, very I high of good. also new, have and

store The demanding. not to that point consumers newness, store. is enough because is It's I nowadays, inject of a for So beautiful is that, the some me time not can or buy time, some have I come why some product from third point. you freshness, a times, are to have the a couple shall beautiful fourth been the excitement store, store, more to point tiffany.com. when same a comfortably The the a in have I

in merchandising a to that a than in or planning why, we to store multiyear more and kind as animate expenses. different are in-store is So financial presentations, it's going we this this, guidance we merchandising, of the store is to indication gave, stores. investment end this to This the presentations store increase that am the totally that linked to of construction, exactly that comps sale. excitement visual point that is visual a area CapEx beyond and in the do. is it Above to the work, way referring is of the I at because what are said is we deliver needed, and is because more excitement

Laura Champine

it. Thank Got you.

Alessandro Bogliolo

you. Thank

Operator

go next to Royal will Bank We Tunick Canada. with Brian of

Brian Tunick

the particularly of curious a just There focus Curious was Thanks understand question, much. the would bring focus versus Alessandro, of you out, last very you or very can if the Tiffany these global the And new lot rank any perspective, on much. to? customer there, strategies couple benchmark anything on the of luxury from second you customer? millennial, peers millennial Thanks in? that my maybe six a or laid product how help newness so very years us introduction refer focused

Alessandro Bogliolo

millennials Brian. with you, share industries. let there Thank of Well, because a is my about in all talking me thoughts, you lot

Tiffany. since luxury, traditionally is the dealing a especially years, at that jewelry. all is look XXX and we been if If has years, millennials there brand with the that Now of

having gift the Tiffany Now that with for we so been also the call historically of with for for engagement, has customers were brand millennials, young but choice strong business graduation, marrying. and been for the them Engagement business, there

being XXX past because of its Tiffany, millennials, almost as the is So brand years. of

an an life, mean, way young our And is message, historic perceived first I generations to -- starting mean me By we say to important focused the actually I over brand society, millennials, these changes example, evolve? would more this shift that especially, important and message. of priority, in I really take of all just that that act. brand of are of generation, and then the usage that amplify be younger Tiffany, generations, from millennials, love -- do all evolve portion are because have because evolve, What by self six Now the a different in strong Tiffany, the six contaminate, they of these really attraction, going more and priorities set are clients clients of empowered approaching we over are them more Tiffany, kind the simply way of today's even down, whatever other it's closer or more generation's of a to and being priorities, on more woman. the celebrating and they millennials and for jewelry are younger let to in from all focused everyday to way, do,

of and the brand is me, we when to middle the This the is say real in have the cultural message, new evolve objective priorities what all for is, Tiffany amplify I set. So conversations. inspires bring really

Operator

next will Retail Tracker. to with We go Marni Shapiro

Marni Shapiro

Thank Congratulations on holiday. a great you.

it the about terms, here, as, lot a of more So think at energy. conversation of would lot of, this and brand feels Alessandro, is -- I you lot as think modern a on energy call, of a a like of lot what there

inform sales luxury How sales associates been to very no equal doesn't going forward? You -- are relocating Tiffany should what is you use you forward; that have what formality. in your historically we of like will a bunch formal longer and learned your And stores pop-up and in your think store? has stores have renovating no a to proposition year. stores you café, your will longer because mentioned this from to look How -- associates going the about

Alessandro Bogliolo

your day. for you and question. definitely, can Thank assure and is going every there, energy that the what us this is I Well moving keeps

Now, one experiment relevant to we if of the some that see are -- in why to many of also in consumers, reasons reasons, -- pop-ups, for they invest and the stores. is I of example; roll will small of was Coast rest order give a one out on recent -- in to the not, then the or the them pop-ups one the you things, West

Marni Shapiro

Grove? In the

Alessandro Bogliolo

of of a pop-up store, it the lasted it the the exactly, unusual, highlights of quite very for was February. a and jewelry. in In just But few one and was Grove, that small personalization was and weeks, it

a could go there, you you designer. whatever, personalization, basically, pendant basically where and So the were buy gold in and silver a have

itself simply on spot, be the you iPad are design an draw product engraved and would You on the on that design that and could purchasing.

us non-millennial. invest it found stores. that a Now area And in concept, millennials, is going out with consumers, was question, many to where an a also important, this to that to we was other roll strongly resonated but And of and to are very previous we the for that, very the lot. that proof

definitely pop-ups also experiments. is these answer the are yes, this So of for kind useful

Marni Shapiro

The sales associates?

Alessandro Bogliolo

retail associates. is, I is about -- was of focus level thousands Well have sales stores, service the this as in impressed, say, really sales I teams of resources, know, our also associates the the real about level, in and thousands only that we terms company. in associate really obsession that, brand is you that how of we not monitored country every service lip at talking, training, level, global level, at strictly think and level. invested in to have that sales metrics about money, that in a do, store where in would serious are but are a that service, Yes, at all I

So definitely is modernize a think there. don't modernization, Well service it people. to role company I is about

-- of that are for all good employees of very luxury as think brand, the they the us brand. I that thing of is inspirational

marketing; sales the as more gets hope. all moment more the well more in brand modern its naturally, we going the as product, associates, will CEO and its more become -- So joyful, easy I be and modern, more I mean, its communication, contaminated in in will

Marni Shapiro

spring Thank much. luck of you for Best very season.

Alessandro Bogliolo

you. Thank

Operator

And to time, I no there at the this will are questions. turn Mark further back call Aaron.

Mark Aaron

you. Thank Okay.

the free our can to sufficiently I think the we other interest. or Please first listening up and I on feel Q&A wrap for May on Q&A me addressed thank with call and I expect we to quarter you call report that hope of calendars, today. formal now. any results remarks a your Please note your areas comments, and Wednesday, Q&A. XX, conference with all questions

Operator

conclude your thank We for you participation. conference. today's This does

Tiffany & Co (TIF) 16 Mar 182017 Q4 Earnings call transcript