Tiffany : Reports Fourth Quarter and Full Year Results

Tiffany & Co. (NYSE: TIF; the “Firm”) at this time reported its monetary outcomes for the three months (“fourth quarter”) and 12 months (“full yr”) ended January 31, 2020. Internet gross sales elevated 3% within the fourth quarter and had been roughly unchanged within the full yr, as in comparison with the respective prior yr durations.

Within the fourth quarter:

• Worldwide web gross sales of $1.Four billion and comparable gross sales each elevated 3% from the prior yr; on a constant-exchange-rate foundation, which excludes the impact of translating foreign-currency-denominated gross sales into U.S. {dollars} (see “Non-GAAP Measures”), web gross sales and comparable gross sales additionally elevated 3% from the prior yr.
  • Worldwide web gross sales and comparable gross sales, excluding the Hong Kong market in each years, elevated by 5% every from the prior yr. The impact of overseas forex translation was not vital.

• Internet earnings of $201 million had been 2% decrease than the prior yr’s $205 million, and web earnings per diluted share had been $1.66 versus $1.67 within the prior yr. Excluding sure prices recorded within the interval associated to the proposed acquisition of the Firm (the “Merger”) by LVMH Moët Hennessy – Louis Vuitton SE (“LVMH”), pursuant to the Settlement and Plan of Merger, dated as of November 24, 2019 (the “Merger Settlement”) by and among the many Firm, LVMH, Breakfast Holdings Acquisition Corp. and Breakfast Acquisition Corp., fourth quarter web earnings had been $218 million, or $1.80 per diluted share (see “Non-GAAP Measures”).

Within the full yr:

• Worldwide web gross sales had been roughly unchanged at $4.Four billion and comparable gross sales declined 1% from the prior yr; on a constant-exchange-rate foundation, web gross sales elevated 1% from the prior yr and comparable gross sales had been roughly unchanged.

• Internet earnings of $541 million had been 8% decrease than the prior yr’s $586 million, and web earnings per diluted share had been $4.45 versus $4.75 within the prior yr. Excluding the aforementioned prices recorded within the interval associated to the Merger, full yr web earnings had been $558 million, or $4.59 per diluted share (see “Non-GAAP Measures”).

Alessandro Bogliolo, Chief Government Officer, mentioned, “We glance again on fiscal 2019 as a yr of progress on all of our strategic initiatives. We attribute the acceleration within the fourth quarter throughout most of our markets to our deal with elevating our gross sales combine in the direction of increased worth objects inside every jewellery product class, with the most important progress being in our gold and gold and diamond choices. The upper value factors of these things contributed to the roughly 10% improve in our general common unit retail value this full yr in comparison with the prior yr.

“Fiscal 2019 additionally mirrored the impression of well-executed introductions of latest merchandise. Our males’s class was reinvigorated with a set of latest designs that we imagine resonated nicely with our prospects. The Tiffany T colour assortment has been a really profitable addition to the enduring Tiffany T assortment. We look ahead to bringing related pleasure to our prospects with very highly effective new designs in 2020.

“The persevering with funding in our retailer community has been multi-faceted with openings, relocations or main renovations of our flagship shops in Shanghai, Hong Kong, London and Sydney. This yr, we stunned and delighted our prospects with our idea retailer on Cat Avenue in Tokyo, a number of pop-up shops around the globe together with our strategic world Tiffany Blue Field Café openings in Shanghai and Hong Kong. In New York, we began the transformative renovation of our landmark retailer on Fifth Avenue and the Tiffany Flagship Subsequent Door opened this January that includes ornamental collaborations in its distinctive house.”

Mr. Bogliolo additionally mentioned, “Our major focus now could be on getting ready our Firm, enterprise and communities for the COVID-19 pandemic and the return to regular operations. The well being and well-being of our staff and prospects are important and we proceed to undertake beneficial safeguards and plans at our shops, places of work and factories as circumstances change. We’ve got needed to briefly shut or shorten working hours of sure shops across the globe. For instance, within the Chinese language Mainland, since January 24, 2020, we now have misplaced roughly half of our whole regular retail buying and selling days on account of closures or shortened hours of operations. Our agile groups are aligned to repeatedly assess the dynamic circumstances ensuing from the worldwide outbreak to find out our near-term actions.”

Mr. Bogliolo concluded, “Because of the pending completion of the Merger, we is not going to be speaking an outlook for the complete yr as we now have historically performed.”

Internet gross sales by area had been as follows:

• Within the Americas, whole web gross sales elevated 4% within the fourth quarter and decreased 2% within the full yr as in comparison with the prior yr, to $640 million and $1.9 billion, respectively; comparable gross sales elevated 3% within the fourth quarter and decreased 2% within the full yr. Gross sales elevated throughout a lot of the area within the fourth quarter, which administration attributed to a rise in spending by native prospects. Within the full yr, gross sales decreased throughout a lot of the area, which administration attributed to decrease spending by overseas vacationers. On a constant-exchange-rate foundation, whole gross sales elevated 4% and comparable gross sales elevated 3% within the fourth quarter; whole gross sales and comparable gross sales each decreased 2% within the full yr.

• In Asia-Pacific, whole web gross sales elevated 8% within the fourth quarter and a pair of% within the full yr, to $342 million and $1.Three billion, respectively; comparable gross sales elevated 7% within the fourth quarter and decreased 1% within the full yr. Complete gross sales progress in each durations mirrored elevated wholesale gross sales, in addition to enterprise gross sales within the full yr. Gross sales efficiency in each durations mirrored double-digit progress within the Chinese language Mainland, vital disruptions in Hong Kong starting earlier within the yr and combined efficiency in different markets within the area. Administration additionally attributed these gross sales outcomes to increased spending by native prospects, partially offset by decrease spending by overseas vacationers. On a constant-exchange-rate foundation, whole gross sales elevated 10% within the fourth quarter and 5% within the full yr, whereas comparable gross sales elevated 9% within the fourth quarter and three% within the full yr, as in comparison with the prior yr.

• In Japan, whole web gross sales decreased 8% within the fourth quarter and elevated 1% within the full yr, to $180 million and $650 million, respectively; comparable gross sales decreased 8% within the fourth quarter and had been unchanged within the full yr. Administration believes that the gross sales lower within the fourth quarter mirrored the Japanese customers’ response to the rise in Japan’s consumption tax that took impact on October 1, 2019. On a constant-exchange-rate foundation, whole gross sales decreased 10% within the fourth quarter and had been unchanged within the full yr, and comparable gross sales decreased 10% and 1%, respectively.

• In Europe, whole web gross sales elevated 4% within the fourth quarter and decreased 1% within the full yr, to $168 million and $498 million, respectively; comparable gross sales elevated 5% within the fourth quarter and declined 1% within the full yr. The rise within the fourth quarter mirrored gross sales progress throughout a lot of the area, which administration attributed to increased spending by each native prospects and overseas vacationers. Administration attributed the lower within the full yr to the impact of overseas forex translation. On a constant-exchange-rate foundation, whole gross sales elevated 4% within the fourth quarter and a pair of% within the full yr and comparable gross sales elevated 5% and a pair of%, respectively.

• Different web gross sales decreased 9% to $26 million within the fourth quarter and a pair of% to $94 million within the full yr, primarily on account of a lower within the wholesale gross sales of diamonds. Comparable gross sales elevated 11% and decreased 9% within the fourth quarter and the complete yr, respectively.

• Tiffany opened 9 Firm-operated shops within the full yr and closed 4. At January 31, 2020, the Firm operated 326 shops (124 within the Americas, 91 in Asia-Pacific, 58 in Japan, 48 in Europe, and 5 within the UAE).

• Gross sales for jewellery classes within the full yr had been as follows: Jewellery collections elevated 2%; Engagement jewellery declined 2%; and Designer jewellery declined 6%. The rise in gross sales within the Jewellery collections class was primarily pushed by the Tiffany T assortment and Excessive jewellery, partially offset by softness in different collections.

Different highlights:

• Gross margin (gross revenue as a proportion of web gross sales) of 63.3% within the fourth quarter and 62.4% within the full yr decreased as in comparison with 63.8% and 63.3% within the respective prior yr durations. The lower within the full yr is primarily attributable to a shift in gross sales combine towards increased value level jewellery, which usually carries a decrease gross margin.

• Promoting, basic and administrative (“SG&A”) bills elevated 3% within the fourth quarter and had been roughly unchanged within the full yr. These modifications mirrored prices recorded within the respective durations associated to the Merger, in addition to elevated retailer occupancy and depreciation bills in each durations, decreased advertising and marketing spending in each durations and elevated labor and incentive compensation prices within the fourth quarter however a lower in such prices for the complete yr. Excluding the aforementioned prices associated to the Merger, SG&A bills decreased 1% in each the fourth quarter and the complete yr of 2019 (see “Non-GAAP Measures”).

• Earnings from operations as a proportion of web gross sales (“working margin”) was 19.8% within the fourth quarter and 16.6% within the full yr, in comparison with 20.3% and 17.8% within the respective prior yr durations. Excluding the aforementioned prices associated to the Merger, working margin was 21.4% within the fourth quarter and 17.0% within the full yr of 2019 (see “Non-GAAP Measures”).

• The efficient earnings tax charge for the fourth quarter of 2019 was 22.1% versus 20.3% within the prior yr. The efficient earnings tax charge for the complete yr was 21.6% versus 21.1% within the prior yr.

• The Firm repurchased roughly 1.Eight million shares of its Frequent Inventory within the full yr at a complete price of $163.Four million and a median price of roughly $91 per share. Pursuant to sure restrictions set forth within the Merger Settlement, the Firm didn’t repurchase any shares of its Frequent Inventory within the fourth quarter.

• Internet inventories at January 31, 2020 had been largely unchanged from the prior yr.

• At January 31, 2020, money and money equivalents and short-term investments totaled $897 million. Complete debt (short-term borrowings and long-term debt) of $1.Zero billion represented 31% of stockholders’ fairness as in comparison with 32% a yr in the past.

Convention Name:

In gentle of the Firm’s entry into the Merger Settlement, the Firm is not going to conduct a convention name to overview its outcomes for the three and 12 months ended January 31, 2020. These outcomes are set forth within the Firm’s Annual Report on Type 10-Okay filed at this time with the U.S. Securities and Trade Fee.

Subsequent Scheduled Announcement:

The Firm expects to report its monetary outcomes for the primary quarter ending April 30, 2020 on June 5, 2020 by issuing a information launch. To obtain e-mail alerts of this in addition to different future bulletins, please register at investor.tiffany.com (and click on on “Contact Us/E-mail Alerts”).

About Tiffany & Co.:

In 1837, Charles Lewis Tiffany based his firm in New York Metropolis the place his retailer was quickly acclaimed because the palace of jewels for its distinctive gems. Since then, TIFFANY & CO. has turn out to be synonymous with class, revolutionary design, effective craftsmanship and artistic excellence. Through the 20th century fame thrived worldwide with retailer community enlargement and steady cultural relevance, as exemplified by Truman Capote’s Breakfast at Tiffany’s and the movie starring Audrey Hepburn.

At present, with greater than 14,00Zero staff, TIFFANY & CO. and its subsidiaries design, manufacture and market jewellery, watches and luxurious equipment – together with greater than 5,00Zero expert artisans who reduce diamonds and craft jewellery within the Firm’s workshops, realizing its dedication to superlative high quality. The Firm operates greater than 300 TIFFANY & CO. retail shops worldwide as a part of its omnichannel strategy. To be taught extra about TIFFANY & CO. in addition to its dedication to sustainability, please go to www.tiffany.com.

Ahead-Wanting Statements:

The historic tendencies and outcomes reported on this launch shouldn’t be thought of a sign of future efficiency. Additional, statements contained on this launch that aren’t statements of historic truth, together with those who seek advice from plans, assumptions and expectations for future durations, are “forward-looking statements” inside the which means of Part 27A of the Securities Act of 1933, Part 21E of the Securities Trade Act of 1934 and the Non-public Securities Litigation Reform Act of 1995, every as amended. Ahead-looking statements by their nature handle issues which can be, to totally different levels, unsure, similar to statements in regards to the consummation of the Merger and the anticipated advantages thereof. Ahead-looking statements embody, however are usually not restricted to, statements that may be recognized by means of phrases similar to ‘expects,’ ‘initiatives,’ ‘anticipates,’ ‘assumes,’ ‘forecasts,’ ‘plans,’ ‘believes,’ ‘intends,’ ‘estimates,’ ‘pursues,’ ‘scheduled,’ ‘continues,’ ‘outlook,’ ‘might,’ ‘will,’ ‘can,’ ‘ought to’ and variations of such phrases and related expressions. Examples of forward-looking statements embody, however are usually not restricted to, statements we make relating to the Firm’s plans, assumptions, expectations, beliefs and goals with respect to the Merger; retailer openings and closings; retailer productiveness; the renovation of the Firm’s New York Flagship retailer, together with the timing and value thereof, and the non permanent relocation of its retail operations to six East 57th Avenue; product introductions; gross sales; gross sales progress; gross sales tendencies; retailer visitors; the Firm’s technique and initiatives and the tempo of execution thereon; the quantity and timing of funding spending; the Firm’s goals to compete within the world luxurious market and to enhance monetary efficiency; retail costs; gross margin; working margin; bills; curiosity expense and financing prices; efficient earnings tax charge; the character, quantity or scope of costs ensuing from latest revisions to the U.S. tax code; web earnings and web earnings per share; share depend; inventories; capital expenditures; money circulation; liquidity; forex translation; macroeconomic and geopolitical circumstances; progress alternatives; litigation outcomes and restoration associated thereto; quantities recovered underneath Firm insurance coverage insurance policies; contributions to Firm pension plans; and sure ongoing or deliberate actual property, product, advertising and marketing, retail, buyer expertise, manufacturing, provide chain, info programs improvement, upgrades and substitute, and different operational initiatives and strategic priorities.

These forward-looking statements are usually not ensures of future outcomes and are primarily based upon the present views, assumptions and plans of administration, and communicate solely as of the date on which they’re made and are topic to various components, dangers and uncertainties, a lot of that are outdoors of our management. You shouldn’t place undue reliance on such statements. Precise outcomes might subsequently differ materially from the deliberate, assumed or anticipated outcomes expressed in, or implied by, these forward-looking statements. Whereas we can’t predict all the components that would type the idea of such variations, key components, dangers and uncertainties embody, however are usually not restricted to: the latest outbreak of the novel coronavirus and modifications in monetary, enterprise, journey and tourism, political, public well being and different circumstances, circumstances, necessities and practices ensuing therefrom; world macroeconomic and geopolitical developments; modifications in curiosity and overseas forex charges; modifications in taxation insurance policies and rules (together with modifications effected by the latest revisions to the U.S. tax code) or modifications within the steering associated to, or interpretation of, such insurance policies and rules; shifting tourism tendencies; regional instability; violence (together with terrorist actions); political actions or occasions (together with the potential for speedy and sudden modifications in authorities, financial and political insurance policies, the imposition of further duties, tariffs, taxes and different costs or different obstacles to commerce, together with on account of modifications in diplomatic and commerce relations or agreements with different international locations); climate circumstances that will have an effect on native and vacationer shopper spending; modifications in shopper confidence, preferences and purchasing patterns, in addition to our potential to precisely predict and well timed reply to such modifications; shifts within the Firm’s product and geographic gross sales combine; variations in the fee and availability of diamonds, gems and treasured metals; antagonistic publicity relating to the Firm and its merchandise, the Firm’s third-party distributors or the diamond or jewellery business extra usually; any non-compliance by third-party distributors and suppliers with the Firm’s sourcing and high quality requirements, codes of conduct, or contractual necessities in addition to relevant legal guidelines and rules; modifications in our aggressive panorama; disruptions impacting the Firm’s enterprise and operations; failure to efficiently implement or make modifications to the Firm’s info programs; modifications in the fee and timing estimates related to the renovation of the Firm’s New York Flagship retailer; delays attributable to third events concerned within the aforementioned renovation; any casualty, harm or destruction to the Firm’s New York Flagship retailer or 6 East 57th Avenue location; the Firm’s potential to efficiently management prices and execute on, and obtain the anticipated advantages from, the operational initiatives and strategic priorities referenced above; circumstances to the completion of the Merger will not be happy or the regulatory approvals required for the Merger will not be obtained, in every case, on the phrases anticipated or on the anticipated schedule which contemplates closing of the acquisition in the course of 2020; the prevalence of any occasion, change or different circumstance that would give rise to the termination of the Merger Settlement or have an effect on the flexibility of the events to acknowledge the advantages of the Merger; the impact of the announcement or pendency of the Merger on the Firm’s enterprise relationships, working outcomes and enterprise usually; dangers that the Merger disrupts the Firm’s present plans and operations and potential difficulties within the Firm’s worker retention on account of the Merger; potential litigation that could be instituted in opposition to the Firm or its administrators or officers associated to the Merger or the Merger Settlement and any antagonistic consequence of any such litigation; the quantity of the prices, charges, bills and different costs associated to the Merger, together with within the occasion of any sudden delays; different dangers to consummation of the Merger, together with the danger that the Merger is not going to be consummated inside the anticipated time interval, or in any respect, which can have an effect on the Firm’s enterprise and the worth of the frequent inventory of the Registrant; and any antagonistic results on the Firm by different basic business, financial, enterprise and/or aggressive components. Penalties of fabric variations in outcomes as in contrast with these anticipated within the forward-looking statements might embody, amongst different issues, enterprise disruption, operational issues, monetary loss, authorized legal responsibility to 3rd events and related dangers. Developments relating to those and different components may warrant modifications to the Firm’s working and strategic plans, together with with respect to retailer openings, closings and renovations, capital expenditures, info programs improvement, stock administration, and persevering with execution on, or timing of, the aforementioned initiatives and priorities. Such penalties and modifications might additionally trigger precise outcomes to vary materially from the anticipated outcomes expressed in, or implied by, the forward-looking statements.

Extra details about potential dangers and uncertainties that would have an effect on the Firm’s enterprise and monetary outcomes is included underneath “Danger Elements” and “Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes of Operations” within the Firm’s Annual Report on Type 10-Okay for the fiscal yr ended January 31, 2020, the definitive proxy assertion on Schedule 14A that the Firm filed on January 6, 2020, and within the Firm’s different filings made with the U.S. Securities and Trade Fee (“SEC”) every now and then, which can be found by way of the SEC’s web site at www.sec.gov. Readers of this launch ought to contemplate the dangers, uncertainties and components outlined above and within the aforementioned Type 10-Okay in evaluating, and are cautioned to not place undue reliance on, the forward-looking statements contained herein. The Firm undertakes no obligation to replace or revise any forward-looking statements to replicate subsequent occasions or circumstances, besides as required by relevant regulation or regulation.

# # #

TIFFANY & CO. AND SUBSIDIARIES

(Unaudited)

NON-GAAP MEASURES

The Firm experiences info in accordance with U.S. Typically Accepted Accounting Ideas (“GAAP”). Internally, administration additionally displays and measures its efficiency utilizing sure gross sales and earnings measures that embody or exclude quantities, or are topic to changes which have the impact of together with or excluding quantities, from essentially the most immediately comparable GAAP measure (“non-GAAP monetary measures”). The Firm presents such non-GAAP monetary measures in reporting its monetary outcomes to offer traders with helpful supplemental info that can permit them to guage the Firm’s working outcomes utilizing the identical measures that administration makes use of to observe and measure its efficiency. The Firm’s administration doesn’t, nor does it recommend that traders ought to, contemplate non-GAAP monetary measures in isolation from, or as an alternative to, monetary info ready in accordance with GAAP. These non-GAAP monetary measures offered right here will not be similar to similarly-titled measures utilized by different corporations.

Internet Gross sales

The Firm’s reported web gross sales replicate both a translation-related profit from strengthening foreign currency echange or a detriment from a strengthening U.S. greenback. Internally, administration displays and measures its gross sales efficiency on a non-GAAP foundation that eliminates the optimistic or damaging results that outcome from translating gross sales made outdoors the U.S. into U.S. {dollars} (“constant-exchange-rate foundation”). Gross sales on a constant-exchange-rate foundation are calculated by taking the present yr’s gross sales in native currencies and translating them into U.S. {dollars} utilizing the prior yr’s overseas forex trade charges. Administration believes this constant-exchange-rate foundation supplies a helpful supplemental foundation for the evaluation of gross sales efficiency and of comparability between reporting durations. The next tables reconcile the gross sales proportion will increase (decreases) from the GAAP to the non-GAAP foundation versus the earlier yr:

Statements of Earnings.

Internally, administration displays and measures its earnings efficiency excluding sure objects listed under. Administration believes excluding such objects supplies a helpful supplemental foundation for the evaluation of the Firm’s outcomes relative to the corresponding interval within the prior yr. The next tables reconcile sure GAAP quantities to non-GAAP quantities:

1. Bills recorded in 2019 associated to the Merger for skilled charges and incentive compensation prices.

TIF-E

View supply model on businesswire.com: https://www.businesswire.com/news/home/20200320005221/en/