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RAPAPORT... Tiffany & Co. reported that revenue rose 5.3 percent year on year to $959.6 million in the third quarter that ended on October 31. Same-store sales rose 4 percent. The jeweler reduced cost of sales by 0.8 percent to $388.7 million, but it also recorded a charge of $93.8 million due to early repayment of debt. Tiffany & Co.'s profit fell 59.6 percent to $38.3 million or 30 cents per share. By region, sales rose 10 percent across the Americas to $459 million during the quarter, with comparable-store sales rising by 11 percent. Across the Asia-Pacific region, Tiffany & Co. recorded a 2 percent increase in sales at $243 million, but same-store sales fell 3 percent. Sales in Japan dropped 12 percent to $113 million and comparable-store sales fell 6 percent. In Europe, revenue jumped 9 percent to $114 million and same-store sales improved 2 percent. 
The value of inventory as of October 31 rose 10 percent year on year to $2.6 billion. Gross margin rose to 59.5 percent in the third quarter, up from 57 percent one year ago, due in part to favorable product costs that were coupled with price increases at the counter. The company issued $550 million of long-term debt, the proceeds of which were applied toward the prepayment of $400 million of existing long-term debt, resulting in a pre-tax loss of 47 cents per share. Cash and cash equivalents and short-term investments dropped to $383 million as of October 31, compared with $521 million one year ago. Total short-term and long-term debt, as a percentage of stockholders' equity, rose to $1.09 billion from $1.01 billion one year ago. Tiffany & Co. maintains its guidance for the fiscal year, which ends on January 31, and anticipates earnings per share of between $4.20 and $4.30, excluding the charge related to repayment of debt. However, the company softened its growth projections just a touch, with worldwide sales increasing by a mid- to high-single-digit percentage rather than a high-single-digit projection that was forecast earlier. Michael J. Kowalski, Tiffany & Co.'s CEO, 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 jewelry collection."
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