SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
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Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 13, 2002
TIFFANY & CO.
(Exact name of Registrant as specified in its charter)
Delaware 1-9494 13-3228013
(State or other jurisdiction of (Commission File Number) I.R.S. Employer
incorporation) Identification Number)
727 Fifth Avenue, New York, New York 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 755-8000
Item 5. Other Events.
On August 13, 2002, Registrant issued the following press release reporting
second quarter results for the period ended July 31, 2002; earnings in line with
expectations.
NEW YORK, August 13, 2002 - Tiffany & Co. (NYSE-TIF) reported today that its net
sales rose 1 percent and net earnings declined 9 percent in the three months
(second quarter) ended July 31, 2002. These results are consistent with the
Company's previously published guidance.
In the second quarter, net sales were $374,427,000 compared with $371,301,000 in
the prior year. On a constant exchange rate basis that excludes translation
effects between foreign currencies and the U.S. dollar, net sales increased nil
percent and comparable store sales declined 5 percent. Net earnings declined 9
percent to $32,714,000, or 22 cents per diluted share, from $36,052,000, or 24
cents per diluted share, in the prior year.
For the six-month period (first half) ended July 31, 2002, net sales of
$721,556,000 were 2 percent higher than $707,702,000 in the prior year. On a
constant exchange rate basis, net sales increased 3 percent and comparable store
sales declined 2 percent. Net earnings declined 2 percent to $65,423,000, or 44
cents per diluted share, compared with $66,814,000, or 44 cents per diluted
share.
Results in Tiffany's three channels of distribution were as follows:
o U.S. Retail sales rose 1 percent to $187,218,000 in the second quarter and
increased 2 percent to $352,888,000 in the first half. Comparable store
sales declined 2 percent in the second quarter (branch stores declined nil
percent and the New York flagship store declined 6 percent) and declined
nil percent in the first half (branch stores rose 1 percent and the New
York flagship store declined 4 percent). Comparable store sales in the
second quarter were primarily affected by a decline in the average
transaction size. Sales to foreign tourists in certain markets also
declined. The Company opened two U.S. stores in the second quarter in
Bellevue, Washington and East Hampton, New York.
o International Retail sales declined 1 percent to $148,462,000 in the second
quarter and declined nil percent to $296,100,000 in the first half. On a
constant exchange rate basis, sales declined 3 percent in the second
quarter and rose 2 percent in the first half. On that basis, comparable
retail store sales in the second quarter and first half declined 13 percent
and 7 percent in Japan (total retail sales in Japan declined 6 percent in
the quarter and were unchanged in the first half), increased nil percent
and 3 percent in other Asia-Pacific markets and declined 10 percent and 8
percent in Europe. This year, the Company has opened department store
boutiques in Japan (2), Korea and Taiwan.
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o Direct Marketing sales rose 12 percent to $38,747,000 in the second quarter
and rose 11 percent to $72,568,000 in the first half. In those respective
periods, combined catalog/internet sales rose 27 percent and 32 percent,
while Business sales declined 5 percent and 8 percent.
Michael J. Kowalski, president and chief executive officer, said, "These sales
results reflect challenging external conditions in the U.S. and in many
international markets. However, we are pleased to be maintaining strong levels
of profitability, due to increased gross margins and expense control efforts. I
am extremely proud of Tiffany's employees and of their ability to weather this
difficult environment, while continuing to pursue our long-term growth
objectives. The appeal of Tiffany's extraordinary product offerings remains very
strong and we look forward to enhancing our leadership position with important
new product introductions, supported by increased marketing communications, in
the coming months."
Mr. Kowalski added, "It is obviously extremely early in the third quarter, but
we have seen recent improvement in comparable store sales in our two largest
markets. Consistent with the expectation of many economists that the uncertain
near-term outlook will soon be followed by more favorable conditions, as well as
easing year-over-year comparisons to the prior year, our internal review leads
us to maintain our recent expectations that call for improving comparable store
sales trends in the U.S. and Japan in the second half of 2002. We are also
maintaining our net earnings per diluted share expectations that call for: 18-20
cents in the third quarter (compared with 16 cents); and 64-67 cents in the
fourth quarter (compared with 55 cents). Tiffany faces this environment with a
strong balance sheet, an experienced worldwide management team and enthusiasm
about our growth potential."
The Company also announced that it had repurchased and retired 600,000 shares of
its Common Stock in the open market during the second quarter at an average cost
of $28.71 per share. The Company has approximately $41 million available for
future repurchases under its authorized plan.
The Company will host a conference call today at 8:30 a.m. (EST) to review its
second 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.
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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 2001 Annual Report and in Form 10-K, 10-Q and 8-K Reports
filed with the Securities and Exchange Commission. The Company undertakes no
obligation to update or revise any forward-looking statements to reflect
subsequent events or circumstances.
# # #
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TIFFANY & CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited, in thousands, except per share amounts)
Three months Six months
ended July 31, ended July 31,
----------------------------------- --------------------------------------
2002 2001 2002 2001
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Net sales $ 374,427 $ 371,301 $ 721,556 $ 707,702
Cost of sales 154,620 155,430 295,334 301,691
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Gross profit 219,807 215,871 426,222 406,011
Selling, general and administrative expenses 160,729 150,201 308,578 291,120
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Earnings from operations 59,078 65,670 117,644 114,891
Other expenses, net 4,554 5,581 8,606 3,534
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Earnings before income taxes 54,524 60,089 109,038 111,357
Provision for income taxes 21,810 24,037 43,615 44,543
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Net earnings $ 32,714 $ 36,052 $ 65,423 $ 66,814
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Net earnings per share:
Basic $ 0.22 $ 0.25 $ 0.45 $ 0.46
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Diluted $ 0.22 $ 0.24 $ 0.44 $ 0.44
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Weighted average number of common shares:
Basic 145,780 146,042 145,607 145,979
Diluted 149,727 151,752 149,824 151,509
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TIFFANY & CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
July 31, January 31, July 31,
2002 2002 2001
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ASSETS
Current assets:
Cash and cash equivalents $ 191,326 $ 173,675 $ 112,730
Accounts receivable, net 87,565 98,527 92,077
Inventories, net 689,732 611,653 667,799
Deferred income taxes 48,957 41,170 36,037
Prepaid expenses and other current assets 34,367 26,826 38,564
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Total current assets 1,051,947 951,851 947,207
Property, plant and equipment, net 573,475 525,585 473,107
Deferred income taxes 5,415 4,560 4,446
Other assets, net 146,519 147,872 152,807
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$ 1,777,356 $ 1,629,868 $ 1,577,567
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 38,313 $ 40,402 $ 51,294
Current portion of long-term debt 51,500 51,500 -
Obligation under capital lease - - 40,726
Accounts payable and accrued liabilities 133,594 134,694 120,774
Income taxes payable 9,413 48,997 16,208
Merchandise and other customer credits 39,196 38,755 36,968
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Total current liabilities 272,016 314,348 265,970
Long-term debt 289,210 179,065 235,437
Postretirement/employment benefit obligations 32,666 29,999 27,926
Other long-term liabilities 74,277 69,511 72,186
Stockholders' equity 1,109,187 1,036,945 976,048
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$ 1,777,356 $ 1,629,868 $ 1,577,567
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Certain reclassifications were made to the prior periods' condensed consolidated balance sheets.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TIFFANY & CO.
BY: /s/ Patrick B. Dorsey
____________________________________
Patrick B. Dorsey
Senior Vice President, Secretary and
General Counsel
Date: August 13, 2002
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