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): February 28, 2002
TIFFANY & CO.
(Exact name of Registrant as specified in its charter)
Delaware 1-9494 13-3228013
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of 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 February 28, 2002, Registrant issued the following press release
announcing its sales and earnings for the fourth quarter and fiscal year ended
January 31, 2001:
TIFFANY & CO.
NEWS RELEASE
Fifth Avenue & 57th Street Contacts:
New York, N.Y. 10022 ---------
James N. Fernandez
(212) 230-5315
Mark L. Aaron
(212) 230-5301
TIFFANY REPORTS FOURTH QUARTER AND 2001 RESULTS;
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MANAGING THROUGH A CHALLENGING RETAIL ENVIRONMENT
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AND MAINTAINING LONG-TERM STRATEGIC FOCUS
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NEW YORK, February 28, 2002 - Tiffany & Co. (NYSE-TIF) today reported its
results for the fourth quarter and year ended January 31, 2002. Challenging
retail conditions in the U.S. and certain international markets have led to
sales declines in both periods, but higher gross margins and expense control
minimized adverse effects on net earnings.
In the fourth quarter ended January 31, 2002, net sales declined 2 percent to
$565,759,000. Net earnings declined 2 percent to $82,745,000, or 55 cents per
diluted share, versus 56 cents per diluted share in the prior year. The Company
recorded a pretax impairment charge of $7,800,000 related to its investment in a
third-party Internet retailer. Therefore, excluding the charge, net earnings for
the quarter would have been $87,424,000, or 58 cents per diluted share.
For the year ended January 31, 2002, net sales of $1,606,535,000 were 4 percent
lower than $1,668,056,000 in the prior year. Net earnings declined 9 percent to
$173,587,000, or $1.15 per diluted share, versus $1.26 per diluted share in the
prior year. Both sales and earnings had reached record levels in the prior year.
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 rose 2 percent in the fourth quarter and rose fractionally in the year,
and worldwide comparable store sales declined 2 percent in the quarter and 4
percent in the year.
Michael J. Kowalski, president and chief executive officer, said, "These results
demonstrate our ability to effectively manage through a challenging retail
environment. We prudently managed expenses and maintained profitability at a
very respectable level. Of utmost importance, we maintained both our long-term
strategic focus and our commitments to exceptional products and service."
Sales results in Tiffany's three channels of distribution were as follows:
o U.S. Retail sales declined 1 percent to $289,549,000 in the fourth quarter
and sales of $786,792,000 in the year were 6 percent below the prior year.
Comparable store sales declined 3 percent in the fourth quarter and 8
percent in the year. From a regional perspective, comparable store sales
declines in the fourth quarter and the year were as follows: 13 percent and
15 percent in Tiffany's flagship New York store and nil percent and 6
percent in U.S. branch stores. Sales declines resulted from a smaller
average transaction size as well as a reduction in traffic, primarily
tourist-related, in certain stores following September 11th.
o International Retail sales of $214,811,000 in the fourth quarter declined 4
percent from the prior year and sales in the year declined 3 percent to
$659,028,000. On a constant-exchange-rate basis in the fourth quarter and
year, International Retail sales increased 5 percent and 7 percent. By
major region, comparable store sales on a constant-exchange-rate basis in
the fourth quarter and year declined 1 percent and rose 3 percent in Japan;
declined 1 percent and nil percent in other Asia-Pacific markets; and
declined 4 percent and rose 1 percent in Europe.
o Direct Marketing sales increased 2 percent to $61,399,000 in the fourth
quarter and 3 percent to $160,715,000 in the year. Combined
catalog/Internet sales increased 30 percent and 23 percent in those
periods. However, Tiffany's Business Sales division experienced sales
declines of 23 percent and 13 percent in the fourth quarter and year.
Mr. Kowalski added, "Tiffany enjoys the prospect of considerable long-term
growth and our balance sheet gives us the financial strength to make that
happen. In 2002, we will continue to open new stores in the U.S., Japan and
other international markets at the pace we have established. We will complement
new jewelry introductions with the launch of an exciting new collection of
TIFFANY & CO. watches. In total, our objective is to further enhance awareness
among current and potential customers who can appreciate the extraordinary
qualities of Tiffany's product offerings and service."
"Forecasting retail trends is a difficult task in an uncertain environment, but
our plans are premised upon an improvement in the second half of 2002. We expect
minimal growth in worldwide net sales in the first half, which would result in
operating earnings modestly lower than the prior year. We then expect net sales
and operating earnings to grow by low-teens and high-teens percentages in the
second half. For the full year, this would result in net earnings per diluted
share in a range of $1.20-$1.27 for 2002. By quarter, net earnings per diluted
share could be in the range of: 16-17 cents in the first quarter (compared with
20 cents); 22-24 cents in the second quarter (compared with 24 cents); 18-20
cents in the third quarter (compared with 16 cents); and 64-67 cents in the
fourth quarter (compared with 55 cents). We are now one month into 2002 and, in
terms of early trends, we are seeing comparable store sales patterns in the U.S.
and Japan similar to what we've experienced in the most recent months," Mr.
Kowalski concluded.
The Company will host a conference call today at 8:30 a.m. (EST) to review its
fourth 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 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.
# # #
TIFFANY & CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited, in thousands, except per share amounts)
Three months
ended January 31, Years ended January 31,
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2002 2001 2002 2001
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Net sales $ 565,759 $ 576,391 $ 1,606,535 $ 1,668,056
Cost of sales 221,132 235,505 663,058 719,642
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Gross profit 344,627 340,886 943,477 948,414
Selling, general and administrative expenses 195,662 197,014 633,580 621,018
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Earnings from operations 148,965 143,872 309,897 327,396
Other expenses, net 11,058 2,750 20,585 9,755
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Earnings before income taxes 137,907 141,122 289,312 317,641
Provision for income taxes 55,162 56,448 115,725 127,057
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Net earnings $ 82,745 $ 84,674 $ 173,587 $ 190,584
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Net earnings per share:
Basic $ 0.57 $ 0.58 $ 1.19 $ 1.31
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Diluted $ 0.55 $ 0.56 $ 1.15 $ 1.26
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Weighted average number of common shares:
Basic 144,909 145,898 145,535 145,493
Diluted 149,688 151,705 150,517 151,816
TIFFANY & CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
January 31, January 31,
2002 2001
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ASSETS
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Current assets:
Cash and cash equivalents $ 173,675 $ 195,613
Accounts receivable, net 98,527 106,988
Inventories, net 611,653 651,717
Deferred income taxes 41,170 28,069
Prepaid expenses and other current assets 29,389 22,458
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Total current assets 954,414 1,004,845
Property, plant and equipment, net 525,585 423,244
Deferred income taxes 4,560 7,282
Other assets, net 145,309 132,969
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$ 1,629,868 $ 1,568,340
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
Short-term borrowings $ 40,402 $ 28,778
Current portion of long-term debt 51,500 0
Obligation under capital lease 0 40,747
Accounts payable and accrued liabilities 161,782 189,531
Income taxes payable 48,997 42,085
Merchandise and other customer credits 38,755 36,057
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Total current liabilities 341,436 337,198
Long-term debt 179,065 242,157
Postretirement/employment benefit obligations 29,999 26,134
Other long-term liabilities 42,423 37,368
Stockholders' equity 1,036,945 925,483
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$ 1,629,868 $ 1,568,340
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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
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Patrick B. Dorsey
Senior Vice President, Secretary
and General Counsel
Date: February 28, 2002