Printer Friendly


 NEW YORK, Aug. 16 /PRNewswire/ -- Tiffany & Co. (NYSE: TIF) today announced the following:
 Tiffany & Co. sales in its U.S. Retail stores increased 13 percent in the three months ended July 31, 1993. However, as expected, the realignment of Tiffany's businesses in Japan resulted in the cancellation of wholesale shipments to Mitsukoshi Ltd., as well as a significant non-recurring charge to earnings. As a result, Tiffany's worldwide net sales in 1993's second quarter were $114,233,000, compared with $120,843,000 in 1992. For the six months ended July 31, 1993, net sales were $223,714,000 compared with $228,068,000 in 1992.
 As previously announced, the company assumed full marketing and merchandising responsibility in July for retail activities at 29 Tiffany & Co. boutiques previously operated by Mitsukoshi Ltd. in Japan. With the realignment, Tiffany will make retail sales to consumers instead of wholesale sales to Mitsukoshi. To implement the realignment, Tiffany agreed to purchase inventory previously sold to Mitsukoshi and, as a result, established a product return reserve of $57.5 million which was charged against earnings in the second quarter. This non-recurring charge had an after-tax impact of $32.7 million, or $2.07 per share.
 Due to the non-recurring charge, the company incurred a net loss in the second quarter of $32,550,000, or $2.06 per share, and a net loss of $31,513,000, or $2.00 per share, in the six month period. Excluding the charge, earnings in the second quarter would have been $162,000, or one cent per share, and $1,199,000, or 8 cents per share, in the six-month period. In 1992, net income was $3,889,000, or 25 cents per share, in the second quarter and was $6,992,000, or 44 cents per share, in the six-month period.
 Sales for Tiffany's three channels of distribution were as follows: U.S. Retail sales increased 13 percent to $60,671,000 in the second quarter and rose 9 percent to $109,182,000 in the six month period, continuing to reflect a healthy increase in sales to local-market customers. Direct marketing sales declined 1 percent to $19,094,000 in the second quarter, due to increased catalog sales but lower corporate division sales. Direct marketing sales rose 1 percent to $37,194,000 in the six-month period. International retail sales declined 28 percent to $34,468,000 in the second quarter and 15 percent to $77,338,000 in the six-month period, due to reduced wholesale shipments to Mitsukoshi Ltd. as part of the business realignment in Japan.
 Commenting on the second quarter, Mr. William R. Chaney, Tiffany's chairman, said, "We are pleased with our recent U.S. Retail sales growth and believe that our initiatives in merchandising and marketing are contributing to these results."
 "The realignment of our business in Japan is a very positive development for Tiffany," Mr. Chaney added. "We view our new role in the management of merchandising and marketing as an evolution which enhances our ability to manage the future development of our business in Japan. The new arrangement, which is also viewed positively my Mitsukoshi, is expected to be more productive and efficient and will eliminate duplication of functions. Financial results in Japan will reflect higher sales and will follow a seasonal pattern consistent with a retail business. The retail sales of the 29 boutiques in 1992 were approximately $123 million. Operating expenses will also increase but are expected to be more than offset by higher gross margins."
 "Tiffany has made significant investments in its business in recent years to expand our channels of distribution, to support an aggressive marketing program that has increased customer awareness of Tiffany throughout the world and to further enhance the superiority of our product offerings. These initiatives, combined with the exceptional strength of our organization and our unique competitive strength, positions Tiffany to achieve substantially improved operating results as economic conditions improve."
 Tiffany & Co. is the internationally renowned jeweler and specialty retailer. Sales are made through Tiffany & Co. stores and boutiques, and to retailers and distributors, primarily in the United States, the Far East, Europe, Canada and the Middle East. Direct marketing sales are made through Tiffany's corporate and catalog divisions.
 Condensed Consolidated Statement of Income
 (unaudited, in thousands, except per share amounts)
 Periods ended Three months Six months
 July 31, 1993 1992 1993 1992
 Net sales $114,233 $120,830 $223,714 $228,068
 Product return for
 Japan realignment (115,000) 0 (115,000) 0
 Total (767) 120,830 (108,714) 228,068
 Cost of goods sold 58,786 61,837 117,486 119,481
 Cost related to product
 return for Japan
 realignment (57,500) 0 (57,500) 0
 Gross profit (2,053) 58,993 48,728 108,587
 S,G&A expenses 53,622 50,440 100,698 93,036
 Inc./(loss) from
 operations (55,675) 8,553 (51,970) 15,551
 Other expenses, net 1,540 1,824 3,410 3,453
 Inc./(loss) bef.
 inc. taxes (57,215) 6,729 (55,380) 12,098
 for inc. taxes (24,665) 2,840 (23,867) 5,106
 Net inc./(loss) $ (32,550) $ 3,889 $(31,513) $ 6,992
 Net inc./(loss) per share:
 Primary $(2.06) $0.25 $(2.00) $0.44
 Fully diluted $(2.06) $0.25 $(2.00) $0.44
 Wtd. avg. no of common
 Primary 15,780 15,794 15,759 15,817
 Fully diluted 16,673 16,687 16,663 16,710
 Condensed Consolidated Balance Sheets
 (in thousands)
 Periods ended 7/31/93 1/31/93 7/31/92
 (unaudited) (unaudited)
 Cash & short-term
 investments $ 6,665 $ 6,672 $ 3,691
 Accounts receivable, net 51,432 51,378 46,268
 Inventories 247,891 224,151 241,398
 Prepaid expenses 24,688 10,107 12,858
 Total current assets 330,676 292,308 304,215
 Property & equipment 96,320 94,454 95,252
 Deferred inc. taxes 21,205 5,723 5,279
 Other assets, net 26,204 25,770 20,261
 Total $474,405 $418,255 $425,007
 Liabilities and Stockholders' Equity
 Short-term borrowings $24,235 $22,458 $69,576
 Accts. payable & accrued
 liabilities 98,497 61,919 64,208
 Inc. taxes payable 0 2,679 1,574
 Provision for
 product return 31,768 0 0
 Total current liabilities 160,529 92,374 139,926
 Long-term debt 101,500 101,500 50,000
 Deferred inc. taxes & other
 liabilities 28,393 6,015 10,325
 Postretirement benefit
 obligation 14,510 13,560 12,510
 Stockholders' equity 169,473 204,806 212,246
 Total $474,405 $418,255 $425,007
 -0- 8/16/93
 /CONTACT: James N. Fernandez, 212-605-4015, or Mark L. Aaron, 212-605-4016, both of Tiffany & Co./

CO: Tiffany & Co. ST: New York IN: REA SU: ERN

MP-TH -- NY027 -- 2945 08/16/93 09:46 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Aug 16, 1993

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters