Follow Us:  twitter facebook RSS

Tiffany Operating Results Strong, But Adverse Arbitration Award Causes Loss

Posted by Kerry Wise  |  March 21,2014  |  08:47 AM

Tiffany Box

( – Tiffany & Co. (NYSE: TIF) reported fourth quarter results that were up on an ongoing basis in spite of the economic environment, but were turned into a loss by an unfavorable arbitration ruling.

The company incurred a net loss for the quarter ended January 31, 2014 (fiscal 2013) of $103.6 million, or negative $0.81 per diluted share, compared to net income of $179.6 million, or $1.40 per diluted share, in the fourth quarter of fiscal 2012.

The current year fourth quarter included a net charge of $473 million pre-tax ($293 million after tax, or $2.27 per diluted share) related to an adverse arbitration ruling in favor of The Swatch Group Ltd.

Without the unfavorable arbitration ruling, Tiffany’s quarterly net income would have been $189.8 million, or $1.47 per diluted share, up 6 percent over last year’s $179.6 million, or $1.40 per diluted share.

Net sales for the quarter of $1.30 billion were up 5 percent over last year’s $1.24 billion. On a constant-currency basis, sales were up 9 percent and comparable store sales were up 9 percent.

Sales were up in all major geographic regions on a constant-currency basis.

Net income for the full year was $181.4 million, or $1.41 per diluted share, compared to $416.2 million, or $3.25 per diluted share, in 2012.

Net sales for the year of $4.03 billion were up 6 percent over last year’s $3.79 billion.

Chairman and chief executive officer Michael J. Kowalski said: “We are proud of our performance this past year. Sales and operating earnings (excluding the arbitration-related charge) rose to record levels. Sales growth was led by fine and statement jewelry, new or expanded jewelry collections including the ATLAS, ZIEGFELD, and HARMONY collections, and continuing strength in our iconic jewelry designs. Tiffany’s marketing communications more effectively engaged global consumers wherever they shopped, our distribution network was expanded by 14 additional stores, and everywhere the store experience was enhanced by improved visual merchandising. And we made important additions to our management team to strengthen our ability to capitalize on the global growth opportunities before us.”

  Print     Email

About the author