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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): March 5, 1997
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
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
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ITEM 5. OTHER EVENTS.
On March 5, 1997, Registrant issued the following press release
announcing its sales and earnings for the three-month period and fiscal year
ended January 31, 1997:
TIFFANY REPORTS RECORD 1996 RESULTS;
EARNINGS UP 49 PERCENT TO $58 MILLION, OR $1.66 PER SHARE,
SALES INCREASE 15 PERCENT TO $922 MILLION
NEW YORK, March 5, 1997 -- Sales and earnings at Tiffany & Co. (NYSE-TIF) rose
to record levels in the fiscal year ended January 31, 1997. Strong earnings
growth resulted from healthy sales performance in Tiffany's three channels of
distribution as well as a higher operating margin.
In the year ended January 31, 1997, net sales rose 15 percent to $922,108,000,
compared with $803,292,000 in the prior year. Net earnings increased 49 percent
to $58,439,000, or $1.66 per share, compared with $39,215,000, or $1.19 per
share.
For the three months (fourth quarter) ended January 31, 1997, net sales rose 17
percent to $327,619,000, compared with $280,700,000 in the prior year. Net
earnings rose 40 percent to $35,769,000, or $1.00 per share, compared with
$25,473,000, or 74 cents per share, in the prior year.
All earnings-per-share figures are reported on a fully diluted basis and have
been adjusted for the two-for-one split of the Company's Common Stock effected
in July 1996.
Sales results in Tiffany's three channels of distribution were as follows:
- - U.S. Retail sales increased 16 percent to $424,185,000 in 1996 and 14 percent
to $151,575,000 in the fourth quarter. Growth was fueled by comparable store
sales increases of 11 percent in both the full year and the fourth quarter, as
well as strong performance in new stores.
- - Direct Marketing sales rose 8 percent to $100,582,000 in 1996 and increased
11 percent to $37,010,000 in the fourth quarter. Strong catalog sales growth
was supplemented by resumed growth in sales to corporations.
- International Retail sales increased 15 percent to $397,341,000 in 1996 and
21 percent to $139,034,000 in the fourth quarter due to geographically
broad-based sales growth. In Japan, Tiffany's largest international market,
total retail sales in local currency rose 28 percent in 1996 and 38 percent
in the fourth quarter, resulting from comparable store sales growth of 13
percent in the year and 20 percent in the fourth quarter
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and strong sales results in Tiffany's flagship store in Tokyo that opened in
May 1996. Despite a weaker yen, total Japan retail sales rose 10 percent in
1996 and 24 percent in the fourth quarter when translated into U.S. dollars.
Strong sales growth was also achieved in other Asia-Pacific markets, Europe
and Canada.
William R. Chaney, Tiffany's chairman, said, "We are gratified that 1996 marked
another year of excellent progress for Tiffany and are pleased that each channel
of distribution contributed to the strong results. Our expansion strategy of
selectively opening new stores in key markets around the world continues to be
very successful. Combined with important merchandising and marketing
initiatives, we are successfully building awareness among growing numbers of
customers of the exceptional product design, quality and value that Tiffany
offers. We are most enthusiastic about pursuing Tiffany's substantial
opportunities for continued growth around the world."
Two nonrecurring events affected fourth quarter results. First, the Company
restructured its jewelry manufacturing operations to outsource production of
certain products. As a result, the Company recognized a pretax gain of $4.5
million, recorded in Other income(deductions), on the sale of certain
manufacturing assets. Tiffany will, subject to certain conditions, source
certain jewelry products from the new owner and will continue to directly
operate its two primary jewelry manufacturing facilities.
Second, the Company took an aggregate pretax $4.4 million charge during the
fourth quarter related to the planned closing and relocation of a U.S. retail
store within its existing market and the impairment of certain European assets.
These charges are included in Selling, General and Administrative expenses.
Tiffany & Co. is the internationally renowned jeweler and specialty retailer.
Sales are made through TIFFANY & CO. stores and boutiques, and to select
retailers and distributors, in the United States, Asia-Pacific, Europe, Canada
and the Middle East. Direct Marketing sales are made through Tiffany's corporate
and catalog divisions.
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TIFFANY & CO. AND SUBSIDIARIES
CONSENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited, in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Full Year
Ended January 31, Ended January 31,
------------------------ ------------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $327,619 $280,700 $922,108 $803,292
Cost of sales 142,457 127,815 422,414 375,922
-------- -------- -------- --------
Gross profit 185,162 152,885 499,694 427,370
Selling, general and administrative expenses 123,548 104,014 390,281 347,357
-------- -------- -------- --------
Earnings from operations 61,614 48,871 109,413 80,013
Other income (deductions) 1,359 (4,030) (6,527) (10,978)
-------- -------- -------- --------
Earnings before income taxes 62,973 44,841 102,886 69,035
Provision for income taxes 27,204 19,368 44,447 29,820
-------- -------- -------- --------
Net earnings $ 35,769 $ 25,473 $ 58,439 $ 39,215
======== ======== ======== ========
Net earnings per share:
Primary $ 1.00 $ 0.77 $ 1.67 $ 1.22
======== ======== ======== ========
Fully diluted $ 1.00 $ 0.74 $ 1.66 $ 1.19
======== ======== ======== ========
Weighted average number of common shares:
Primary 35,852 32,931 34,953 32,234
Fully diluted 35,868 34,816 35,706 34,546
</TABLE>
Note: Shares and net earnings per share data have been adjusted for a
two-for-one split of the Company's Common Stock in July 1996.
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TIFFANY & CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
<TABLE>
<CAPTION>
JANUARY 31, JANUARY 31,
1997 1996*
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $117,161 $ 81,966
Accounts receivable 80,772 80,084
Inventories 335,389 311,252
Deferred income taxes 14,297 8,060
Prepaid expenses 21,364 20,042
-------- --------
Total current assets 568,983 501,404
Property and equipment, net 129,346 115,214
Deferred income taxes 10,259 10,033
Other assets, net 30,830 27,606
-------- --------
$739,418 $654,257
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 76,338 $ 78,967
Accounts payable and accrued liabilities 110,068 107,609
Income taxes payable 25,829 19,672
Merchandise and other customer credits 14,237 11,054
-------- --------
Total current liabilities 226,472 217,302
Long-term trade payable 0 25,688
Reserve for product return 5,800 11,238
Long-term debt 92,675 101,500
Postretirement/employment benefit obligation 19,191 18,031
Other long-term liabilities 17,016 16,120
Stockholders' equity 378,264 264,378
-------- --------
$739,418 $654,257
======== ========
</TABLE>
* Reclassified for comparative purposes.
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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/ James N. Fernandez
-------------------------------
James N. Fernandez
Senior Vice President - Finance
Date: March 11, 1997 and Chief Financial Officer
