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Tiffany Reports Solid Third Quarter Results

New York, N.Y., November 25, 2014 - Tiffany & Co. (NYSE: TIF) today reported its results for the three months ("third quarter") ended October 31, 2014. Worldwide net sales increased 5% over the prior year (or 7% on a constant-exchange-rate basis when excluding the effect of translating foreign-currency-denominated sales into U.S. dollars (see "Non-GAAP Measures")) led by sales growth in the Americas region. Net earnings were impacted by a charge related to early repayments of debt; net earnings, excluding that charge, rose 5% (see "Non-GAAP Measures"). Management maintained its earnings guidance (excluding the charge) for the current fiscal year.

Michael J. Kowalski, chairman and chief executive officer, said, "We were pleased with overall sales performance, especially in light of economic and geopolitical challenges around the world. We continue to pursue exciting opportunities in marketing, merchandising and store expansion to support longer-term growth, and are especially encouraged with initial results from the recent launch of our TIFFANY T jewelry collection."

In the third quarter:

In the nine months ("year-to-date") ended October 31, 2014:

Net sales highlights by region were as follows:

Other financial highlights:

Outlook for 2014:

For the fiscal year ending January 31, 2015, management is maintaining its previous guidance that calls for net earnings in a range of $4.20-$4.30 per diluted share, excluding the debt-extinguishment charge noted above. This full year forecast is based on the following assumptions, which are approximate and may or may not prove valid:

  1. Worldwide net sales increasing by a mid-to-high-single-digit percentage (versus the previous high-single-digit forecast).
  2. Opening 10 Company-operated stores and closing two existing stores: this includes opening four in the Americas, two in Asia-Pacific, two in Japan, and one each in Europe and Russia, while closing one each in the Americas and Asia-Pacific.
  3. Operating margin increasing due to a higher gross margin.
  4. Interest and other expenses, net of $60 million.
  5. An effective income tax rate of 35%.
  6. Net inventories increasing by a high-single-digit percentage.
  7. Capital expenditures of $250 million, versus $221 million last year, largely due to incremental investments in information technology systems.
  8. Free cash flow (cash flow from operating activities less capital expenditures) of at least $400 million when excluding the after-tax debt extinguishment charge noted above.

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 is the internationally-renowned jeweler founded in New York in 1837. Through its subsidiaries, Tiffany & Co. manufactures products and operates TIFFANY & CO. retail stores worldwide, and also engages in direct selling through Internet, catalog and business gift operations. For additional information, please visit www.tiffany.com or call our shareholder information line at 800-TIF-0110.

Next Scheduled Announcement:
The Company expects to report its November-December holiday period sales results on January 12, 2015. To be notified 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 October 31, 2014. The following tables reconcile certain GAAP amounts to non-GAAP amounts:

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

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