Tiffany's Second Quarter Earnings Rise 26%

Tiffany & Co. today reported increases of 18 percent in net sales and 26 percent in net earnings in its second quarter. Net earnings were 28 cents per share on a diluted basis, versus 22 cents a year ago.

Michael J. Kowalski, chairman and CEO, said, "We are pleased and especially encouraged by our U.S. sales growth, which strengthened as the quarter progressed, as well as with the progress we are making in many international markets. We believe these results again confirm the lasting appeal of Tiffany's products”.

In the second quarter, net sales of $442,495,000 were 18 percent higher than $374,427,000 in the prior year. Sales growth occurred in Tiffany's domestic and international operations. Worldwide, on a constant-exchange-rate basis that excludes the effect of translating local-currency-denominated sales into U.S. dollars, net sales rose 16 percent and comparable store sales rose 8 percent.

Second quarter net earnings increased 26 percent to $41,147,000, compared with $32,714,000 a year ago. Earnings benefited from the sales increase, an improved expense ratio and a lower effective tax rate.

In the six months ended July 31, 2003, net sales rose 16 percent to $838,334,000, compared with $721,556,000.  On a constant-exchange-rate basis, net sales increased 13 percent and comparable worldwide store sales rose 4 percent.  Net earnings increased 18 percent to $77,010,000 compared with $65,423,000.

Sales results in Tiffany's four channels of distribution were as follows:

U.S. Retail sales increased 14 percent to $213,036,000 in the second quarter and 10 percent to $386,622,000 in the first half. Sales at Tiffany's New York flagship store were up 2 percent in the second quarter and down 1 percent in during the first half of the year.

International Retail sales rose 14 percent to $168,987,000 in the second quarter and 13 percent to $334,511,000 in the first half. On a constant-exchange-rate basis, total sales in Japan increased 7 percent and 4 percent) for the quarter and first half respectively.

Direct marketing sales increased 13 percent to $43,943,000 in the second quarter and 12 percent to $81,226,000 in the first half. Combined Internet/catalog sales rose 21 percent in both the quarter and the half due to continued strength in e-commerce sales, while Business sales rose 2 percent in the quarter and declined fractionally in the first half.