Tiffany & Co. (NYSE:TIF) today announced preliminary sales
and operating earnings for August and September 2020 (the
“two-month period”).
Worldwide net sales for the two-month period declined slightly
from the comparable period in 2019 and operating earnings,
inclusive of transaction-related expenses, increased approximately
25% from the comparable 2019 period. Positive sales trends are
continuing in October. Globally, e-commerce sales continued to show
strong growth, nearly doubling in the two-month period from the
comparable period in 2019 and representing 13% of total net sales
year-to-date through September 30. E-Commerce sales have
historically represented approximately 6% of total net sales. Sales
in Mainland China remained extremely strong and the Tiffany T1
line, the Company’s newest gold and gold with diamonds jewelry
collection, continued its strong performance during the two-month
period.
Despite the dramatic decline in tourism in the United States in
2020, sales in the United States declined by a low double-digit
percentage in the two-month period relative to the comparable
period in the prior year. This represents a meaningful sequential
improvement since May 2020 to sales declines in the United States
each month relative to the same month of the prior year, and the
Company expects the sales trends in the United States to further
improve in the fourth quarter.
Chief Executive Officer Alessandro Bogliolo said, “While we
still expect full-year results to be substantially impacted by
COVID-19, we are very pleased with the way the business has
rebounded following the first quarter and continues to rebound in
the third quarter, especially in Mainland China, and to recover in
the United States.”
Tiffany’s cash balance continued to be in excess of $1 billion
at September 30 and is expected to be approximately $900 million at
year-end, which assumes the repayment of a $500 million draw
earlier this year on the Company’s global revolver and capital
expenditures for the full year that are flat to 2019 and
approximately 30 percent below the 2020 pre-COVID plan. The
decrease in capital expenditures relative to plan largely reflects
costs deferred to 2021 due to the legally mandated temporary
shutdown of the Fifth Avenue flagship renovation earlier this year
and the Company’s decision to defer certain planned store openings
and renovations to 2021.
The Company currently expects a mid-single digit percentage
decline in sales and a mid-single digit percentage increase in
operating earnings in the fourth quarter of 2020 relative to the
same period in the prior year. Fourth quarter diluted earnings per
share are expected to increase from the year-ago period by a
mid-to-high single digit percentage on an as-reported basis.
About Tiffany & Co.
In 1837, Charles Lewis Tiffany founded his company in New York
City where his store was soon acclaimed as the palace of jewels for
its exceptional gemstones. Since then, TIFFANY & CO. has become
synonymous with elegance, innovative design, fine craftsmanship and
creative excellence. During the 20th century, its fame thrived
worldwide with store network expansion and continuous cultural
relevance, as exemplified by Truman Capote’s Breakfast at Tiffany’s
and the film starring Audrey Hepburn.
Today, with more than 14,000 employees, TIFFANY & CO. and
its subsidiaries design, manufacture and market jewelry, watches
and luxury accessories - including nearly 5,000 skilled artisans
who cut diamonds and craft jewelry in the Company’s workshops,
realizing its commitment to superlative quality. TIFFANY & CO.
has a long-standing commitment to conducting its business
responsibly, sustaining the natural environment, prioritizing
diversity and inclusion, and positively impacting the communities
in which we operate.
The Company operates more than 300 TIFFANY & CO. retail
stores worldwide as part of its omni-channel approach. To learn
more about TIFFANY & CO., as well as its commitment to
sustainability, please visit www.tiffany.com.
August and September Selected Financial
Information:
The information above regarding the Company’s net sales,
operating earnings and cash balances for the two-month period ended
September 30, 2020 (the “August-September 2020 financial data”) and
for the two-month period ended September 30, 2019 (the
“August-September 2019 financial data”) is preliminary and
unaudited. While the Company applied its standard month-end
financial closing procedures to the selected financial data
presented in this release, it did not apply its standard
quarter-end financial closing procedures to such information, as
the quarter is not yet completed. These financial closing
procedures that will be performed at quarter end include certain
procedures that are not applied at the end of a month within the
quarter, such as (i) review of, and potential adjustments with
respect to, certain inventory obsolescence and accounts receivable
allowances, (ii) evaluation of potential impairments of long-lived
assets and (iii) in the case of the 2020 financial data, final
management review (which remains in process), among others.
Accordingly, actual financial data subjected to such quarter-end
closing procedures and, in the case of the August-September 2020
financial data, as may be included in the Company’s quarterly
results for the fiscal quarter ending October 31, 2020 and the
fiscal year ending January 31, 2021 could differ, possibly
materially, from the August-September 2019 financial data and the
August-September 2020 financial data set forth above. Therefore,
you should not place undue reliance upon such financial data.
Forward-Looking Statements:
Certain statements in this release including, without
limitation, statements relating to expectations for Tiffany’s
performance in future periods and plans, assumptions and
expectations for Tiffany’s business, may constitute
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, Section 21E of the Securities Exchange
Act of 1934 and the Private Securities Litigation Reform Act of
1995, each as amended. Forward-looking statements by their nature
address matters that are, to different degrees, uncertain, as they
provide current expectations of future events. Words such as
“anticipates,” “believes,” “expects,” “intends,” “plans,”
“projects,” “may,” “will,” or other similar expressions may
identify such forward-looking statements.
These and other forward-looking statements are not guarantees of
future results and are subject to risks, uncertainties and
assumptions that could cause actual results to differ materially
from those discussed in forward-looking statements, including, as a
result of factors, risks and uncertainties over which we have no
control. The inclusion of such statements should not be regarded as
a representation that any plans, estimates or expectations will be
achieved. You should not place undue reliance on such statements.
Important factors, risks and uncertainties that could cause actual
results to differ materially from such plans, estimates or
expectations include, but are not limited to, the following: (i)
the effect of any announcement or event relating to the pendency of
the merger, including the potential impact on Tiffany’s business
relationships, operating results, and business generally; (ii)
risks relating to the merger and litigation relating to the merger
as previously disclosed in Tiffany’s SEC filings; (iii) the amount
and timing of the costs, fees, expenses and other charges related
to the merger, including in the event of any unexpected delays and
in light of the pending merger-related litigation; (iv) any adverse
effects on Tiffany by other general industry, economic, business
and/or competitive factors; (v) the COVID-19 pandemic, including
the duration and scope thereof, the availability of a vaccine or
cure that mitigates the effect of the virus, the potential for
additional waves of outbreaks and changes in financial, business,
travel and tourism, consumer discretionary spending and other
general consumer behaviors, political, public health and other
conditions, circumstances, requirements and practices resulting
therefrom; (vi) protest activity in the U.S.; and (vii) such other
factors as are set forth in Tiffany’s periodic public filings with
the SEC, including but not limited to those described under the
headings “Risk Factors” and “Forward Looking Statements” in its
most recently filed Form 8-K dated September 28, 2020, its Form
10-Q for the quarter ended July 31, 2020, its Form 10-K for the
fiscal year ended January 31, 2020, the definitive proxy statement
on Schedule 14A, filed with the SEC on January 6, 2020, and in its
other filings made with the SEC from time to time, which are
available via the SEC’s website at www.sec.gov. Consequences of
material differences in results as compared with those anticipated
in the forward-looking statements could include, among other
things, business disruption, operational problems, financial loss,
legal liability to third parties and similar risks, any of which
could have a material adverse effect on Tiffany’s financial
condition, results of operations, credit rating, liquidity or stock
price. In addition, there can be no assurance that the merger will
be completed, or if it is completed, that it will close in the
timeframe previously anticipated, or that the expected benefits of
the merger will be realized. Because Tiffany does not know when, or
if, the merger will be completed, Tiffany has not included certain
costs related to the closing of the merger, such as advisor fees,
litigation-related expenses, and expenses related to the
acceleration of equity pursuant to the terms of the merger
agreement, in its financial forecasts for the remainder of the
fiscal year ending January 31, 2021 or any future period. These
expenses are expected to be significant, although the vast majority
of these costs will only be incurred if and when the merger is
ultimately completed.
Forward-looking statements reflect the views and assumptions of
management as of the date of this release with respect to future
events. Tiffany does not undertake, and hereby disclaims, any
obligation, unless required to do so by applicable securities laws,
to update any forward-looking statements as a result of new
information, future events or other factors. The inclusion of any
statement in this release does not constitute an admission by
Tiffany or any other person that the events or circumstances
described in such statement are material.
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version on businesswire.com: https://www.businesswire.com/news/home/20201015005364/en/
Jason Wong (973) 254-7612 jason.wong@tiffany.com
Tiffany (NYSE:TIF)
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