Delaware
(State or other jurisdiction
of incorporation)
|
1-9494
(Commission
File Number)
|
13-3228013
(I.R.S. Employer Identification No.)
|
727 Fifth Avenue, New York, New York
(Address of principal executive offices)
|
|
10022
(Zip Code)
|
TIFFANY & CO. | |
BY: | /s/ Patrick B. Dorsey |
Patrick B. Dorsey | |
Senior Vice President, Secretary and | |
General Counsel |
Fifth Avenue & 57th Street
|
Contact:
|
|
New York, N.Y. 10022
|
Mark L. Aaron
|
|
212-230-5301
|
||
mark.aaron@tiffany.com
|
·
|
Worldwide net sales rose 18% to $3.6 billion. On a constant-exchange-rate basis that excludes the effect of translating foreign-currency-denominated sales into U.S. dollars, worldwide net sales and comparable store sales rose 15% and 13%.
|
·
|
Net earnings rose 19% to $439 million, or $3.40 per diluted share, compared with $368 million, or $2.87 per diluted share, in the prior year. Net earnings as a percentage of net sales rose to 12.1%, from 11.9% in the prior year.
|
·
|
Net earnings in fiscal 2011 were reduced by $0.20 per diluted share for nonrecurring items related to the relocation of Tiffany’s headquarters staff. Net earnings in fiscal 2010 had been reduced by $0.06 per diluted share for various non-recurring items (see “Non-GAAP Measures” schedule). Excluding those items, net earnings and net earnings per diluted share rose 24% and 23%.
|
·
|
Worldwide net sales increased 8% to $1.2 billion. On a constant-exchange-rate basis, worldwide net sales rose 7% and comparable store sales rose 5% (see “Non-GAAP Measures” schedule).
|
·
|
Net earnings declined 2% to $178 million, or $1.39 per diluted share, from the prior year’s $181 million, or $1.41 per diluted share.
|
·
|
Net earnings in the fourth quarter of 2010 had been reduced by $0.03 per diluted share for nonrecurring expenses (see SG&A expenses below). Excluding that nonrecurring item, net earnings in this fourth quarter were 4% below the prior year (see “Non-GAAP Measures” schedule).
|
·
|
In the Americas region, sales increased 15% to $1.8 billion in fiscal 2011 and rose 5% to $605 million in the fourth quarter. On a constant-exchange-rate basis, total Americas sales rose 14% in fiscal 2011 and 5% in the fourth quarter, largely due to comparable store sales increasing 13% in the year and 3% in the fourth quarter; on that basis, comparable branch store sales in the Americas increased 11% in the year and 3% in the fourth quarter, while sales in the New York flagship store increased 20% in the year and 2% in the fourth quarter. Combined Internet and catalog sales in the Americas rose 6% in fiscal 2011 and declined 4% in the fourth quarter.
|
·
|
In the Asia-Pacific region, sales rose 36% to $748 million in the full year and increased 19% to $225 million in the fourth quarter. On a constant-exchange-rate basis, total sales and comparable store sales rose 31% and 27% in the year, and rose 18% and 13% in the fourth quarter, due to increased sales in most countries.
|
·
|
In Japan, sales increased 13% to $617 million in fiscal 2011 and rose 12% to $204 million in the fourth quarter. On a constant-exchange-rate basis, total sales in Japan rose 3% in the year and 5% in the fourth quarter and comparable store sales increased 4% in both periods.
|
·
|
In Europe, sales increased 17% to $421 million in the fiscal year and 3% to $142 million in the fourth quarter. On a constant-exchange-rate basis, total sales in Europe rose 12% in the year and 3% in the fourth quarter while comparable store sales increased 6% in the year and declined 2% in the fourth quarter. Throughout the fourth quarter and year, sales growth in Continental Europe was relatively stronger than results in the U.K.
|
·
|
At January 31, 2012, the Company operated 247 stores (102 in the Americas, 58 in Asia-Pacific, 55 in Japan and 32 in Europe), versus 233 (96 in the Americas, 52 in Asia-Pacific, 56 in Japan and 29 in Europe) a year ago.
|
·
|
Other sales declined 5% to $51 million in the fiscal year and 22% to $12 million in the fourth quarter due to declines in wholesale sales of rough diamonds in both periods as well as lower wholesale sales of finished products to independent distributors in the fourth quarter.
|
·
|
Gross margin (gross profit as a percentage of net sales) of 59.0% in the fiscal year compared with 59.1% a year ago, reflecting both higher product costs and shifts in product sales mix toward higher-priced jewelry that achieves a lower gross margin being largely offset by sales leverage on fixed costs. Gross margin in the fourth quarter was 60.4%, versus 60.9% in the prior year for generally similar reasons as noted above except for a lack of sales leverage on fixed costs.
|
·
|
SG&A (selling, general and administrative) expenses increased 18% in the fiscal year and 10% in the fourth quarter, with both increases affected by nonrecurring costs related to the relocation of Tiffany’s New York headquarters staff (see “Non-GAAP Measures” schedule). Excluding the nonrecurring costs in all periods, SG&A expenses rose 16% in the fiscal year and 11% in the fourth quarter primarily due to increased store occupancy, labor and marketing costs.
|
·
|
The Company’s effective income tax rate was 34.0% in the fiscal year versus last year’s 32.7% rate. In the fourth quarter, the effective income tax rate of 34.5% in 2011 was above last year’s 32.1%.
|
·
|
At January 31, 2012, cash and cash equivalents and short-term investments totaled $442 million, compared with $741 million at the prior year-end. Total short-term and long-term debt equaled $712 million at January 31, 2012 and represented 30% of stockholders’ equity, compared with $688 million, and 32% a year ago.
|
·
|
Net inventories of $2.1 billion at January 31, 2012 were 28% above the prior year-end. Finished goods inventories rose 16% in fiscal 2011 due to higher product acquisition costs, store openings, product introductions and expanded assortments, as well as the lower-than-expected sales growth in the fourth quarter. Combined raw material and work-in-process inventories increased 46%, reflecting higher product acquisition costs, expanded rough diamond sourcing and increased internal production.
|
·
|
Capital expenditures were $239 million in 2011, compared with $127 million in 2010. A portion of the increase was due to the relocation of Tiffany’s New York headquarters staff, as well as increased store renovations and other factors.
|
·
|
The Company repurchased approximately 2.6 million shares of its Common Stock in the fiscal year at a total cost of $174 million, or an average cost of $66.23 per share. In the fourth quarter, the Company spent $35 million to repurchase approximately 525,000 shares at an average cost of $67.26 per share. At January 31, 2012 approximately $218 million was available for future repurchases under the currently authorized plan which expires in January 2013.
|
a)
|
Worldwide net sales (in U.S. dollars) increasing by approximately 10%, primarily driven by sales growth in Asia-Pacific and the Americas.
|
b)
|
Adding a net of 24 Company-operated stores including nine in the Americas, seven in Asia-Pacific, three in Europe, and commencing operation of five stores in the United Arab Emirates.
|
c)
|
The operating margin approximately unchanged from the prior year (excluding nonrecurring items recorded in 2011).
|
d)
|
Interest and other expenses, net approximately equal to the prior year.
|
e)
|
An effective income tax rate of approximately 34 - 35%.
|
f)
|
Net earnings per diluted share in a range of $3.95 - $4.05, or a 16% - 19% increase over the prior year. Excluding the nonrecurring costs recorded in fiscal 2011, this represents growth of 10% - 13% over 2011’s $3.60 per diluted share. Most of the expected earnings growth is expected to occur in the latter part of 2012.
|
g)
|
Net inventories increasing approximately 15%.
|
h)
|
Capital expenditures of approximately $240 million.
|
Fourth Quarter 2011 vs. 2010
|
Full Year 2011 vs. 2010
|
|||||
GAAP
Reported
|
Translation
Effect
|
Constant-
Exchange-Rate
Basis
|
GAAP
Reported
|
Translation
Effect
|
Constant-
Exchange-Rate
Basis
|
|
Net Sales:
|
||||||
Worldwide
|
8%
|
1%
|
7%
|
18%
|
3%
|
15%
|
Americas
|
5%
|
—
|
5%
|
15%
|
1%
|
14%
|
Asia-Pacific
|
19%
|
1%
|
18%
|
36%
|
5%
|
31%
|
Japan
|
12%
|
7%
|
5%
|
13%
|
10%
|
3%
|
Europe
|
3%
|
—
|
3%
|
17%
|
5%
|
12%
|
Comparable Store Sales:
|
||||||
Worldwide
|
6%
|
1%
|
5%
|
16%
|
3%
|
13%
|
Americas
|
3%
|
—
|
3%
|
13%
|
—
|
13%
|
Asia-Pacific
|
14%
|
1%
|
13%
|
31%
|
4%
|
27%
|
Japan
|
12%
|
8%
|
4%
|
13%
|
9%
|
4%
|
Europe
|
(3)%
|
(1)%
|
(2)%
|
10%
|
4%
|
6%
|
Three Months Ended
January 31, 2012
|
Three Months Ended
January 31, 2011
|
|||
(in thousands, except per share amounts)
|
$
(after tax)
|
Diluted
EPS
|
$
(after tax)
|
Diluted
EPS
|
Net earnings, as reported
|
$ 178,395
|
$ 1.39
|
$ 181,224
|
$ 1.41
|
Headquarters relocation a
|
–
|
–
|
3,887
|
0.03
|
Net earnings, as adjusted
|
$ 178,395
|
$ 1.39
|
$ 185,111
|
$ 1.44
|
a
|
On a pre-tax basis includes charges of $323,000 within cost of sales and $6,086,000 within SG&A expenses for the three months ended January 31, 2011 associated with Tiffany’s plan to consolidate its New York headquarters staff within one location.
|
Year Ended
January 31, 2012
|
Year Ended
January 31, 2011
|
|||
(in thousands, except per share amounts)
|
$
(after tax)
|
Diluted
EPS
|
$
(after tax)
|
Diluted
EPS
|
Net earnings, as reported
|
$ 439,190
|
$ 3.40
|
$ 368,403
|
$ 2.87
|
Headquarters relocation a
|
25,994
|
0.20
|
10,768
|
0.08
|
Tax benefit, net b
|
–
|
–
|
(3,096)
|
(0.02)
|
Net earnings, as adjusted
|
$ 465,184
|
$ 3.60
|
$ 376,075
|
$ 2.93
|
a
|
On a pre-tax basis includes charges of $213,000 and $1,010,000 within cost of sales and $42,506,000 and $16,625,000 within SG&A for the years ended January 31, 2012 and 2011 associated with Tiffany’s consolidation of its New York headquarters staff within one location.
|
b
|
Includes $3,096,000 of tax benefits primarily related to a change in the tax status of certain subsidiaries associated with the acquisition in 2009 of additional equity interests in diamond sourcing and polishing operations.
|
Three Months Ended January 31,
|
Years Ended January 31,
|
||||||||
2012
|
2011
|
2012
|
2011
|
||||||
Net sales
|
$
|
1,187,440
|
$
|
1,101,215
|
$
|
3,642,937
|
$
|
3,085,290
|
|
Cost of sales
|
470,525
|
430,238
|
1,491,783
|
1,263,012
|
|||||
Gross profit
|
716,915
|
670,977
|
2,151,154
|
1,822,278
|
|||||
Selling, general and administrative expenses
|
431,172
|
392,797
|
1,442,728
|
1,227,497
|
|||||
Earnings from operations
|
285,743
|
278,180
|
708,426
|
594,781
|
|||||
Interest and other expenses, net
|
13,316
|
11,091
|
43,475
|
47,347
|
|||||
Earnings from operations before income taxes
|
272,427
|
267,089
|
664,951
|
547,434
|
|||||
Provision for income taxes
|
94,032
|
85,865
|
225,761
|
179,031
|
|||||
Net earnings
|
$
|
178,395
|
$
|
181,224
|
$
|
439,190
|
$
|
368,403
|
|
Net earnings per share:
|
|||||||||
Basic
|
$
|
1.41
|
$
|
1.43
|
$
|
3.45
|
$
|
2.91
|
|
Diluted
|
$
|
1.39
|
$
|
1.41
|
$
|
3.40
|
$
|
2.87
|
|
Weighted-average number of common shares:
|
|||||||||
|
|
||||||||
Basic
|
126,747
|
126,628
|
127,397
|
126,600
|
|||||
Diluted
|
128,344
|
128,793
|
129,083
|
128,406
|
|||||
|
|
January 31,
|
|
January 31,
|
||||||
2012
|
2011
|
||||||||
ASSETS
|
|||||||||
Current assets:
|
|||||||||
Cash and cash equivalents and short-term investments
|
$
|
442,190
|
$
|
740,871
|
|||||
Accounts receivable, net
|
184,085
|
185,969
|
|||||||
Inventories, net
|
2,073,212
|
1,625,302
|
|||||||
Deferred income taxes
|
83,124
|
41,826
|
|||||||
Prepaid expenses and other current assets
|
107,064
|
90,577
|
|||||||
Total current assets
|
2,889,675
|
2,684,545
|
|||||||
Property, plant and equipment, net
|
767,174
|
665,588
|
|||||||
Other assets, net
|
502,143
|
385,536
|
|||||||
$
|
4,158,992
|
$
|
3,735,669
|
||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|||||||||
Current liabilities:
|
|||||||||
Short-term borrowings
|
$
|
112,973
|
$
|
38,891
|
|||||
Current portion of long-term debt
|
60,822
|
60,855
|
|||||||
Accounts payable and accrued liabilities
|
328,962
|
258,611
|
|||||||
Income taxes payable
|
60,977
|
55,691
|
|||||||
Merchandise and other customer credits
|
62,943
|
65,865
|
|||||||
Total current liabilities
|
626,677
|
479,913
|
|||||||
Long-term debt
|
538,352
|
588,494
|
|||||||
Pension/postretirement benefit obligations
|
338,564
|
217,435
|
|||||||
Other long-term liabilities
|
186,802
|
147,372
|
|||||||
Deferred gains on sale-leasebacks
|
119,692
|
124,980
|
|||||||
Stockholders' equity
|
2,348,905
|
2,177,475
|
|||||||
|
|
||||||||
$
|
4,158,992
|
$
|
3,735,669
|
||||||