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Tiffany Reports Fourth Quarter and Full Year Results; Management Provides Its Financial Outlook For 2013

New York, N.Y., March 22, 2013 - Tiffany & Co. (NYSE: TIF) today reported its financial results for the fourth quarter and fiscal year ended January 31, 2013. In the quarter, worldwide net sales increased 4% and net earnings rose 1%. In the year, worldwide net sales increased 4% while net earnings declined 5% (or 11% when excluding nonrecurring items in the prior year - see "Non-GAAP Measures" schedule). Earnings per diluted share were $1.40 in the quarter and $3.25 in the year. Management also provided its financial forecast for the fiscal year ending January 31, 2014.

In the three months ("fourth quarter") ended January 31, 2013:

In the 12 months ("full year") ended January 31, 2013:

Michael J. Kowalski, chairman and chief executive officer, said, "These quarterly sales results were consistent with the holiday trends we had issued in early January. While financial results in fiscal 2012 were disappointing due to lower-than-expected sales growth and pressures on gross margin, we continued to maintain a longer-term focus on strengthening global awareness of the TIFFANY & CO. brand and on further developing compelling product offerings."

Net sales highlights were as follows:

Other financial highlights:

Mr. Kowalski added, "We will be pursuing important growth opportunities in 2013, with plans including exciting new jewelry collections, enhanced customer communications through print and digital media, and expansion of our global base with additional stores. Tiffany is well positioned to achieve net earnings growth of 6%-9% and healthy free cash flow."

Outlook for 2013:

For the fiscal year ending January 31, 2014, management's forecast is based on the following assumptions (which are approximate and may or may not prove valid):

  1. Worldwide net sales growth of 6%-8% in U.S dollars. On a constant-exchange-rate basis, an expected high-single-digit percentage increase in worldwide net sales includes sales growth in all regions, ranging from a mid-teens percentage increase in Asia-Pacific to a low-single-digit increase in Japan.
  2. Opening a total of 14 (net) Company-operated stores including five in the Americas, seven in Asia-Pacific, three in Europe and closing one in Japan, as well as refurbishing a number of existing locations around the world.
  3. Operating earnings increasing in line with sales growth; a modest improvement in the SG&A expense ratio, due to sales leverage on fixed costs, is expected to be offset by a modestly lower gross margin largely tied to a product sales mix skewed toward higher-priced categories.
  4. Interest and other expenses, net of $58 million.
  5. An effective income tax rate of 35%.
  6. Net earnings from operations increasing 6%-9% to a range of $3.43-$3.53 per diluted share. Net earnings from operations are expected to decline approximately 15%-20% in the first quarter due to gross margin pressure and higher marketing-related costs, to be followed by earnings growth in all subsequent quarters. In addition, this forecast excludes $0.05 per diluted share of expected first quarter charges for staffing and occupancy adjustments.
  7. Net inventories increasing 5%; capital expenditures of $230 million; and free cash flow (cash flow from operating activities less capital expenditures) of $300 million (see "Non-GAAP Measures" schedule), versus $109 million in 2012.

Today's Conference Call:
The Company will conduct a conference call today at 8:30 a.m. (Eastern Time) to review actual results and the outlook. Please click on http://investor.tiffany.com ("Events and Presentations").

Next Scheduled Announcement:
The Company expects to report its first quarter financial results on Tuesday May 28, 2013. To be notified of future announcements, please register at http://investor.tiffany.com ("E-Mail Alerts").

Tiffany & Co. operates jewelry stores and manufactures products through its subsidiary corporations. Its principal subsidiary is Tiffany and Company. The Company operates TIFFANY & CO. retail stores in the Americas, Asia-Pacific, Japan, Europe and the United Arab Emirates, and also engages in direct selling through Internet, catalog and business gift operations. For more information, visit www.tiffany.com or call the shareholder information line at 800-TIF-0110.

This document contains certain "forward-looking" statements concerning the Company's objectives and expectations with respect to sales, products, store openings, operating margin, interest and other expenses, the effective income tax rate, net earnings, inventories, growth opportunities, capital expenditures and free cash flow. Actual results might differ materially from those projected in the forward-looking statements. Information concerning risk factors that could cause actual results to differ materially is set forth in the Company's Form 10-K, 10-Q and 8-K reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.

TIFFANY & CO. AND SUBSIDIARIES
(Unaudited)

NON-GAAP MEASURES

The Company reports information in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). The Company's management does not, nor does it suggest that investors should, consider non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The Company presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate the Company's operating results.

Net Sales

The Company's reported sales reflect either a translation-related benefit from strengthening foreign currencies or a detriment from a strengthening U.S. dollar. Internally, management monitors its sales performance on a non-GAAP basis that eliminates the positive or negative effects that result from translating sales made outside the U.S. into U.S. dollars ("constant-exchange-rate basis"). Management believes this constant-exchange-rate basis provides a more representative assessment of sales performance and provides better comparability between reporting periods. The following table reconciles sales percentage increases (decreases) from the GAAP to the non-GAAP basis versus the previous year:

Net Earnings

The accompanying press release presents net earnings and highlights prior year nonrecurring items in the text. Management believes excluding such items presents the Company's year-to-date results on a more comparable basis to the corresponding period in the prior year, thereby providing investors with an additional perspective to analyze the results of operations of the Company at January 31, 2013. The following table reconciles GAAP net earnings and net earnings per diluted share ("EPS") to non-GAAP net earnings and net earnings per diluted share, as adjusted:

Free Cash Flow

Internally, management monitors its cash flow on a non-GAAP basis as the ability to generate free cash flow demonstrates how much cash a company has available for discretionary and non-discretionary items after deduction of capital expenditures. The Company's operations require regular capital expenditures for the opening, renovation and expansion of stores and distribution and manufacturing facilities as well as ongoing investments in information technology. Management believes this provides a more representative assessment of operating cash flows. The following table reconciles GAAP net cash provided by operating activities to non-GAAP free cash flows:

Contact:
Mark L. Aaron
212-230-5301
mark.aaron@tiffany.com

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