UNITED STATES
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: May 29, 2009
TIFFANY & CO.
(Exact name of Registrant as specified in its charter)
Delaware 1-9494 13-3228013
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
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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
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On May 29, 2009, Registrant issued a press release announcing its unaudited earnings and results of operations for the first quarter ended April 30, 2009. A copy of the May 29, 2009 press release is attached hereto as Exhibit 99.1 to this Form 8-K.
The information in this Current Report on Form 8-K is being furnished pursuant to Item 2.02 Results of Operations and Financial Condition. In accordance with General Instruction B.2 of Form 8-K, the information in this report shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly stated by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
99.1 Press Release dated May 29, 2009.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
TIFFANY & CO.
BY: /s/ Patrick B. Dorsey
______________________________________
Patrick B. Dorsey
Senior Vice President, General Counsel
and Secretary
Date: May 29, 2009
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EXHIBIT INDEX
Exhibit No. Description
99.1 Text of Press Release issued by Tiffany & Co., dated May 29, 2009.
Exhibit 99.1
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
New York, N.Y., May 29, 2009 - Tiffany & Co. (NYSE: TIF) reported lower sales, operating margin and net earnings for its first quarter ended April 30, 2009. These financial results were consistent with management's expectations for the quarter and the Company reaffirmed its outlook for the full year.
Net sales in the first quarter declined 22% to $523.1 million. On a constant-exchange-rate basis, which excludes the effect of translating foreign-currency-denominated sales into U.S. dollars (see attached "Non-GAAP Measures" schedule), worldwide net sales declined 18%, with a 21% decline in comparable store sales.
Net earnings in the first quarter were $24.3 million, or $0.20 per diluted share, compared with $64.4 million, or $0.50 per diluted share, in the prior year.
Michael J. Kowalski, chairman and chief executive officer, said, "Despite reduced consumer demand in the luxury sector, Tiffany is, and is projected to remain, solidly profitable and will generate substantial cash from operations. We remain confident about the continued effectiveness of our fundamental growth strategies, and in their ability to generate superior financial returns when economic conditions improve."
o In the Asia-Pacific region, first quarter sales declined 9% to $201.4 million. Results varied by country. On a constant-exchange-rate basis, sales declined 7% and comparable store sales declined 9%. The Company opened stores in Hangzhou, China and Busan, Korea, and closed one in Ikebukuro, Japan.
o In Europe, sales of $55.6 million were 8% below the prior year. On a constant-exchange-rate basis, sales increased 18% largely due to incremental sales from new stores opened in the prior year, and comparable store sales rose 3%.
o The Company operated 209 TIFFANY & CO. stores and boutiques at April 30, 2009 (88 in the Americas, 97 in Asia-Pacific and 24 in Europe), versus 192 locations a year ago (81 in the Americas, 93 in Asia-Pacific and 18 in Europe).
o Other sales declined 43% to $7.0 million in the first quarter due to reduced wholesale sales of diamonds partly offset by higher sales in soon-to-be-closed IRIDESSE stores.
o Selling, general and administrative (SG&A) expenses declined 15% in the first quarter, reflecting reduced staff and marketing costs, as well as variable cost savings tied to lower sales levels.
o Interest and other expenses, net in the first quarter were higher than the prior year primarily due to increased interest expense related to recent issuances of long-term debt.
o The effective tax rate was 42.0% in the first quarter compared with 36.7% in the prior year, due to a shift in the geographical mix of earnings, but the Company continues to expect an effective tax rate of approximately 37% for the full year.
o Accounts receivable at April 30, 2009 were 30% lower than the prior year as a result of the sales decline.
o Net inventories at April 30, 2009 were 6% above the prior year due to the opening of new stores and lower sales. Consistent with the Company's objective, net inventories have declined 3% since the beginning of the fiscal year and are projected to decline by a single-digit percentage for the full year.
o The Company's balance sheet liquidity at April 30, 2009 included: cash and cash equivalents of $303.7 million (versus $159.6 million a year ago) and total short-term borrowings and long-term debt of $821.8 million (versus $611.2 million a year ago). The increase in debt included $400 million of new long-term debt issuances which have been and will be applied to retire existing debt and for general corporate purposes.
Tiffany & Co. operates jewelry and specialty retail stores and manufactures products through its subsidiary corporations. Its principal subsidiary is Tiffany and Company. The Company operates TIFFANY & CO. retail stores and boutiques in the Americas, Asia-Pacific and Europe and engages in direct selling through Internet, catalog and business gift operations. Other operations include consolidated results from ventures operated under trademarks or tradenames other than TIFFANY & CO. For additional information, please visit www.tiffany.com or call our shareholder information line at 800-TIF-0110.
This document contains certain "forward-looking" statements concerning the Company's objectives and expectations with respect to sales, operating margin, earnings, inventories and cash flow. Actual results might differ materially from those projected in the forward-looking statements. Information concerning risk factors that could cause actual results to differ materially is set forth in the Company's 2008 Annual Report on Form 10-K and in other reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.
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TIFFANY & CO. AND SUBSIDIARIES
(Unaudited)
The Company's reported sales reflect either a translation-related benefit from strengthening foreign currencies or a detriment from a strengthening U.S. dollar.
The Company reports information in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). Internally, management monitors its sales performance on a non-GAAP basis that eliminates the positive or negative effects that result from translating international sales into U.S. dollars ("constant-exchange-rate basis"). Management believes this constant-exchange-rate basis provides a more representative assessment of the sales performance and provides better comparability between reporting periods.
The Company's management does not, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The Company presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate the Company's operating results. The following table reconciles sales percentage increases (decreases) from the GAAP to the non-GAAP basis versus the previous year:
First Quarter 2009 vs. 2008
------------------------------------------------
Constant-
GAAP Translation Exchange-
Reported Effect Rate Basis
------------------------------------------------
Net Sales:
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Worldwide (22)% (4)% (18)%
Americas (31)% (1)% (30)%
U.S. (31)% -- (31)%
Asia-Pacific (9)% (2)% (7)%
Japan (7)% 6 % (13)%
Other Asia-Pacific (11)% (15)% 4 %
Europe (8)% (26)% 18 %
Comparable Store Sales:
-----------------------
Worldwide (24)% (3)% (21)%
Americas (34)% (2)% (32)%
U.S. (34)% -- (34)%
Asia-Pacific (10)% (1)% (9)%
Japan (6)% 7 % (13)%
Other Asia-Pacific (16)% (11)% (5)%
Europe (19)% (22)% 3 %
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TIFFANY & CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited, in thousands, except per share amounts)
Three Months Ended April 30,
-------------------------------
2009 2008
-------------- -------------
Net sales $ 523,059 $ 668,149
Cost of sales 232,032 286,895
-------------- -------------
Gross profit 291,027 381,254
Selling, general and administrative expenses 236,587 277,945
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Earnings from operations 54,440 103,309
Interest and other expenses, net 12,444 1,508
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Earnings from operations before income taxes 41,996 101,801
Provision for income taxes 17,655 37,411
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Net earnings $ 24,341 $ 64,390
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Net earnings per share:
Basic $ 0.20 $ 0.51
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Diluted $ 0.20 $ 0.50
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Weighted-average number of common shares:
Basic 124,001 126,458
Diluted 124,164 128,773
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TIFFANY & CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
April 30, January 31, April 30,
2009 2009 2008
----------------- ----------------- ------------------
ASSETS
------
Current assets:
Cash and cash equivalents $ 303,729 $ 160,445 $ 159,625
Accounts receivable, net 135,437 164,447 193,154
Inventories, net 1,553,717 1,601,236 1,466,166
Deferred income taxes 12,130 13,640 27,388
Prepaid expenses and other current assets 120,772 108,966 86,784
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Total current assets 2,125,785 2,048,734 1,933,117
Property, plant and equipment, net 721,452 741,048 742,116
Other assets, net 315,015 312,501 334,618
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$ 3,162,252 $ 3,102,283 $ 3,009,851
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LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Short-term borrowings $ 74,199 $ 242,966 $ 199,421
Current portion of long-term debt 40,170 40,426 65,728
Accounts payable and accrued liabilities 163,102 223,566 175,777
Income taxes payable 25,324 27,653 49,979
Merchandise and other customer credits 64,239 67,311 68,573
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Total current liabilities 367,034 601,922 559,478
Long-term debt 707,477 425,412 346,010
Pension/postretirement benefit obligations 203,550 200,603 81,836
Other long-term liabilities 151,977 152,334 134,422
Deferred gains on sale-leasebacks 125,555 133,641 144,577
Stockholders' equity 1,606,659 1,588,371 1,743,528
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$ 3,162,252 $ 3,102,283 $ 3,009,851
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