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Iconic jeweller Tiffany reports marginal drop in sales in Q3
27
Nov '08
Tiffany & Co. today reported its results for the three-month period (third quarter) ended October 31, 2008. A one percent decline in worldwide sales reflected weakness in the U.S. offset by increased sales outside the U.S. Net earnings fell in comparison with the prior year, when a substantial gain was recorded on a sale and leaseback transaction.

Michael J. Kowalski, chairman and chief executive officer, said, "Customers have adjusted their spending in reaction to economic conditions and near-term uncertainties. Despite that, Tiffany maintained a high level of profitability in the third quarter and, in fact, net earnings per share rose 13% when excluding certain items from the prior year."

Net sales declined 1% to $618.2 million in the third quarter. On a constant-exchange-rate basis which excludes the effect of translating foreign-currency-denominated sales into U.S. dollars (see attached "Non-GAAP Measures" schedule), worldwide net sales declined 2% and comparable store sales declined 7%.

In the nine-month period (year-to-date), net sales increased 7% to $2.0 billion. On a constant-exchange-rate basis, worldwide net sales rose 4% and comparable store sales declined 2%.

Net earnings from continuing operations in the third quarter were $43.8 million, or $0.35 per diluted share. In the prior year, net earnings from continuing operations of $103.1 million, or $0.74 per diluted share, included: (i) a pre-tax gain of $105.1 million, or $0.48 per diluted share after tax, which resulted from the Company's sale-leaseback of the building housing its Tokyo flagship store; and (ii) a $10 million contribution, or $0.04 per diluted share after tax, to The Tiffany & Co. Foundation. Excluding those prior-year-items, net earnings per share increased 13% (see attached "Non-GAAP Measures" schedule).

In the year-to-date, net earnings from continuing operations were $188.9 million, or $1.49 per diluted share, compared with $223.6 million, or $1.60 per diluted share, in the prior year. Excluding the items mentioned above, net earnings from continuing operations increased 27% over the comparable period in 2007. In 2007, discontinued operations included an after-tax charge of $22.6 million related to the sale of the Company's Little Switzerland business, as well as losses from those operations.

Tiffany & Co


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