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Tiffany worldwide comparable store sales shine in Q3

30 Nov '07

3 min read

Tiffany & Co reported an 18% increase in its net sales for the three months (third quarter) ended October 31, 2007, reflecting strong sales in the U.S. and many international markets. Comparable store sales rose 8% in the U.S. and 10% (on a constant-exchange-rate basis) internationally. Net earnings increased dramatically due to strong operating performance and a gain on the sale-leaseback of Tiffany's flagship store in Tokyo.

Net sales in the third quarter increased 18% to $627,323,000. 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), net sales rose 16% due to a 9% increase in worldwide comparable store sales and sales from new stores.

In the nine-month period (year-to-date), net sales rose 18% to $1,885,614,000. On a constant-exchange-rate basis, net sales increased 17% and worldwide comparable store sales rose 10%.

During the quarter, the sale-leaseback of the multi-tenant building housing the Company's Tokyo flagship store was completed for proceeds of $328,000,000. The Company recorded as other operating income a pre-tax gain of $105,051,000, or $0.48 per diluted share after tax, and a deferred pre-tax gain of $75,244,000 will be amortized in SG&A expenses over a 15-year period. The Company contributed $10,000,000, or $0.04 per diluted share after tax, of the proceeds to The Tiffany & Co. Foundation. The sale-leaseback of the single-tenant building housing the Company's flagship store in London was also completed in the third quarter for proceeds of $149,000,000; on that transaction, the entire pre-tax gain of $63,961,000 was deferred and will be amortized in SG&A expenses over a 15-year period.

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