Tiffany’s Posts 31% Gain in 2000

Sales and earnings for Tiffany & Co., the well-know international luxury goods retailer, set new records in 2000, despite cautious customer spending in the fourth quarter, say company officials and reports.

Net earnings for the year rose 31%-the retailer’s eighth consecutive year of 20%-plus earnings gains-thanks to a 13% net sales increase and an improved operating margin. Worldwide comparable store sales rose 13% on a constant currency basis. Despite difficult market and economic factors, fourth quarter results still managed-though barely-to finish on the plus side, even in comparison to 1999’s heady results. Michael J. Kowalski, Tiffany president and chief executive officer, noted that the full-year results extend Tiffany’s record of strong annual sales and earnings growth, despite the “recent uncertainty surrounding the economy and equity markets” which have affected customers’ average spending levels. Still, he said, “We believe it is prudent to expect [Tiffany’s] earnings in the first half of 2001 to be approximately equal” to those of the prior year. ‘Despite the temporary slowdown in the business cycle,” Kowalski added, “Tiffany’s competitive and financial strengths position us extremely well to maintain the normal pace of our strategic pursuit of expansion, merchandising and marketing opportunities. We have tempered our near-term expectations, but our longer-term potential remains substantial.’

In the year ending Jan. 31, 2001, net sales rose 13% to $1,67 billion. Net earnings rose 31% to $190 million, up from $145.6 million. In the fourth quarter alone, net sales tallied $576.4 million, a 2% gain, while net earnings came to $84.7 million, only fractionally higher than the $84.6 million of the previous year. (Net earnings per share figures are adjusted to reflect the Company’s two-for-one stock split in July 2000.) Sales by channel of distribution were as follows: U.S. retail sales rose 12% to $833,221,000 for the fiscal year, thanks largely to a comp store sales growth of 12%. In the fourth quarter, sales rose 1% to $292,433,000 while comparable store sales declined 1% (compared to a 26% increase in the prior year).

At Tiffany’s flagship New York store, sales rose 6% for the year, but dropped 5% in the fourth quarter. Comparable branch store sales rose 15% in the year and 1% in the fourth quarter. International retail sales rose 15% to $679.2 million for the year and 3% to $223.8 million in the quarter, due to growth in most markets. In Japan, comparable store sales in local currency rose 11% and 8% in the year and fourth quarter, respectively. When translated into U.S. dollars, that was 13% and 0% for those periods, respectively. Direct marketing sales-which includes corporate, catalog, and Internet sales-increased 13% to $155.5 million in the year and 7% to $60.1 million in the fourth quarter. The company began Internet sales in November 1999.