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Tiffany Reports First Quarter Results; Higher Sales And Margins Generate Strong Earnings Growth

New York, N.Y., May 21, 2014 - Tiffany & Co. (NYSE: TIF) today reported its financial results for the three months ("first quarter") ended April 30, 2014. A 13% increase in worldwide net sales, combined with an improved operating margin, resulted in 50% growth in net earnings. Management also increased its earnings forecast for the current fiscal year.

Michael J. Kowalski, chairman and chief executive officer, said, "This is an excellent and encouraging start to the year. We were pleased with the strong and broad-based sales growth across most regions and product categories and our ability to leverage those improved sales into very significant growth in operating and net earnings. Strength in fine and statement jewelry sales continued, while sales of our new or expanded jewelry collections accelerated, led by our ATLAS collection."

First quarter overview:

Net sales highlights were as follows:

Other financial highlights:

Outlook for 2014:

For the fiscal year ending January 31, 2015, management is now forecasting net earnings in a range of $4.15-$4.25 per diluted share, versus its previously-published forecast of $4.05-$4.15 per diluted share. This forecast is based on the following assumptions, which are approximate and may or may not prove valid:

  1. Worldwide net sales increasing by a high-single-digit percentage, with all regions expected to achieve growth in their total sales in U.S. dollars and in comparable store sales on a constant-exchange-rate basis.
  2. Adding 13 Company-operated stores and closing four existing stores: opening four in the Americas, five in Asia-Pacific, two in Japan, and one each in Europe and Russia, while closing one each in the Americas, Asia-Pacific, Japan and the U.A.E.
  3. Earnings from operations as a percentage of net sales ("operating margin") increasing due to a higher gross margin and SG&A expense growth less than sales growth.
  4. Uncertainty about the timing of sales improvement in Japan, as well as higher marketing spending, are expected to result in the second quarter's net earnings approximately equal to the prior year.
  5. Interest and other expenses, net of $65-$70 million with the increase over 2013 reflecting the interest cost on higher average levels of net-debt.
  6. An effective income tax rate of 35%.
  7. A 6% increase in net inventories.
  8. Capital expenditures of $270 million, versus $221 million last year, with the increase largely reflecting incremental investments in certain information technology systems.
  9. Free cash flow (cash flow from operating activities less capital expenditures) of at least $400 million.

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").

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 and Europe, as well as in the United Arab Emirates and Russia. It also engages in direct selling through Internet, catalog and business gift operations. For more information, please visit www.tiffany.com or call the shareholder information line at 800-TIF-0110.

Next Scheduled Announcement:
The Company expects to report its second quarter results on Wednesday August 27th. For notifications of future announcements, please register at http://investor.tiffany.com ("E-Mail Alerts").

This document contains certain "forward-looking" statements concerning the Company's objectives and expectations with respect to sales, products, store openings and closings, 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 net sales reflect either a translation-related benefit from strengthening foreign currencies or a detriment from a strengthening U.S. dollar. Internally, management monitors and measures 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 the 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 expenses tied to certain items in the text. Management believes excluding such items presents the Company's 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 April 30, 2014. The following table reconciles certain GAAP amounts to non-GAAP amounts:

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

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