Mark L. Aaron - Vice President of Investor Relations
Patrick F. McGuiness - Chief Financial officer and Senior Vice President
Michael J. Kowalski - Chairman, Chief Executive Officer, Member of Management Board, Member of Corporate Social Responsibility Committee and Member of Dividend Committee
Tiffany & Co. (TIF) Q4 2013 Earnings Call March 22, 2013 8:30 AM ET
Good day, everyone, and welcome to this Tiffany & Co. Fourth Quarter Conference Call. Today’s call is being recorded. Participating on today's call are Mr. Mike Kowalski, Tiffany's Chairman and CEO; Mr. Pack -- Pat McGuiness, Tiffany's Chief Financial Officer; and Mr. Mark Aaron, Tiffany's Vice President of Investor Relations. At this time, I would like to turn the conference over to Mr. Aaron. Please go ahead.
Mark L. Aaron
Thank you, and welcome to this conference call.
We issued our financial results earlier today and hope that, by now, you've had an opportunity to review the news release. On today's call, Mike, Pat and I will provide our insights into the fourth quarter and full year results and comment on Tiffany's plans and outlook for the coming year.
Before continuing, please note Tiffany's Safe Harbor provision that statements made on this call that are not historical facts are forward-looking statements. Actual results might differ materially from the expectations projected in those forward-looking statements. Additional information concerning risk factors that could cause actual results to differ materially is set forth in Tiffany'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.
Now we can proceed with a multifaceted review of Tiffany's performance. Taking a big picture view, Tiffany's financial results in 2012 did not achieve the expectations we'd established at the start of the year. Net sales rose 4% due to single-digit percentage growth in all regions, although below initial expectations in the Americas and Asia Pacific, and gross margin continued to be pressured by product input costs and unfavorable sales mix. SG&A expense growth was contained, but in total, net earnings per diluted share of $3.25 was 4% below 2011 on a GAAP basis and declined 10% when excluding nonrecurring items in 2011. The conclusion to the year, with 4% sales growth and only a slight earnings increase in the fourth quarter, was also certainly not up to our normal performance standards. Let's first look at sales by region.
In the Americas, sales in the fourth quarter rose 2%, which was consistent with the increase we had reported for the November, December holiday season and reflected jewelry units equal to the prior year and a slight increase in the average price per unit sold. For the full year, total Americas sales also rose 2%, on top of a 15% increase in 2011 as an increase in the average price per units sold was partly offset by decline in jewelry units sold, primarily in silver jewelry. The Americas region accounted for 48% of worldwide sales in 2012 versus 50% in 2011.
On a constant-exchange-rate basis, total sales rose 2% in both the quarter and year, while comparable store sales declined 2% in both the quarter and year.
Geographically, sales from the New York flagship store declined 3% in the fourth quarter, while a 3% decline in the year went up against a 20% increase in 2011. The New York flagship store accounted for 8% of worldwide sales in 2012.
For the quarter and year, there were minimal changes in sales to U.S. customers and foreign tourists. Foreign tourist spending represented about 45% of the New York store sales in 2012, and the largest spending came from Asia Pacific-based visitors, followed by customers from Europe. While we can no longer report foreign tourists sales data for the U.S. in its entirety due to legal restrictions on the collection of customer data in several states, we believe that sales to foreign tourists, which in 2011 was estimated at almost 1/4 of U.S. sales, will continue to be of growing importance in certain U.S. and Canadian stores as we expand customer awareness of the Tiffany brand globally.
Americas brand store comps declined 2% in the fourth quarter, and a 2% decline in the full year was up against an 11% comp increase in 2011. There were no significant deviations from the norm in terms of geographical performance within the U.S. in the quarter or full year.
Outside the U.S., total sales rose in Canada, but that reflected new stores, while we saw a double-digit sales growth in Mexico, and our business in Brazil continues to develop nicely. In addition to our New York flagship store, our next 3 largest stores by sales volume in the region in 2012 were in California in San Francisco and South Coast Plaza in Costa Mesa and on Michigan Avenue in Chicago.
We expanded our Americas store base by adding 13 locations in 2012. In the U.S., we opened 4 stores, including 1 in Salt Lake City, 2 in California in the San Francisco Centre and in La Jolla, and our third store in Manhattan in SoHo. In Canada, we added 6 locations, including 1 in Montréal's Ritz-Carlton Hotel, a third store in Toronto in their Sherway Gardens Mall and the conversion of 4 department store boutiques in the Holt Renfrew department stores in Calgary, Montréal, Ottawa and Vancouver into company-operated locations. We also opened 2 stores in Mexico in Mexico City in Altavista and a store in Rio de Janeiro's Village Mall, marking our fourth location in Brazil. And we finished 2012 with 115 stores in the Americas.
Beyond stores, we grew our Americas e-commerce and catalog sales in 2012 with a 6% combined sales increase in the fourth quarter and 4% growth in the year, driven by an increased average order size. We introduced a newly designed and more elegant catalog in the fourth quarter, which in conjunction with our brand strategy, offers a somewhat higher average price point, as compared to the traditional selections catalog that it replaced.
Let's now turn to the Asia-Pacific region, which represented 21.4% of worldwide sales in 2012, up from 20.5% in 2011. Sales rose 13% in the fourth quarter, which was consistent with holiday period growth, and rose 8% for the full year. The quarterly increase was fueled by growth in jewelry units sold and in the average price per units sold, while the annual increase was almost entirely driven by higher jewelry unit volume. On a constant-exchange-rate basis, total Asia-Pacific sales rose 10% in the quarter and increased 8% in the full year. Comps rose 6% in the quarter, while a 2% comp increase for the year was on top of an enormous 27% comp increase in full year 2011.
In the quarter, we experienced broad-based growth throughout Greater China and other markets, and that was true to a lesser extent in the year. The largest portion of the Asia-Pacific region is Greater China, which represented a little more than 1/2 of the region's sales in 2012. Our highest volume store, by far, in the Asia-Pacific region in 2012 was the one on Canton Road in Hong Kong.
We broadened Tiffany's presence in the region by adding 8 stores in 2012 and finished the year with 66 stores. This included opening 6 stores in China, in Harbin, Nanjing, Shanghai, Shenyang, Tianjin and Wuhan. We also opened our second store in Sydney, in Bondi Junction, which represents our sixth store in Australia, and a second store in Singapore's Changi Airport, which helps us accommodate an increasingly mobile customer base. As we've said before, expanding Tiffany's store presence, especially in China, serves the dual purpose of generating local sales demand but also stimulating spending when Chinese customers travel to other regions.
Japan accounted for 17% of worldwide sales in 2012 and 2011. Total sales declined 6% in the fourth quarter due to a decline in jewelry units, mostly in entry-level price points, and increased 4% in the year due to an increase in the average price per jewelry units sold. However, it's important to note the effect on translation from a recently weaker yen. In the fourth quarter, the yen was 8% weaker than the dollar even though it was only 2% weaker for the full year.
Looking at results on a constant-exchange-rate basis. Both total sales and comp store sales in the fourth quarter rose 2%, while for the full year, total sales rose 6% and comps rose 7% on top of a 4% comp increase in 2011. As Pat will discuss in his comments, we have factored a negative translation effect into our plans for 2013. The store count in Japan was unchanged at 55 locations in 2012, with our flagship store in the Ginza generating 12% of total sales in Japan. During the year, we relocated 3 locations to other department stores in Tokyo; Chiba; and Umeda, Osaka.
Now moving on to Europe. That region accounted for 11.4% of worldwide sales in 2012 compared with 11.6% in 2011. Total sales rose 3% in the fourth quarter, slightly better than our holiday results, and rose 3% in the full year primarily due to increases in both periods in the average price per jewelry units sold. On a constant-exchange-rate basis, in the fourth quarter, total sales rose 3% and comparable store sales were equal to the prior year, while for the year, total sales increased 7% and comparable store sales rose 2%.
Sales in the United Kingdom accounted for 45% of total European sales in 2012, and our highest volume store in Europe is on Old Bond Street in London. In both the quarter and year, sales in overall Continental Europe, led by growth in Germany, modestly outpaced sales performance in the U.K. Our sales in Europe are benefiting from foreign tourist spending in some markets, especially in France and Spain. That foreign tourist spending, which we estimate accounts for about 1/4 of European sales, is more than offsetting softness in local demand in some markets that is likely tied to soft economic conditions there.
We added 2 European stores in 2012: 1 in Nice, representing our fourth store in France; and 1 in Prague, marking our entry into the Czech Republic, and we're very pleased with initial results. We now operate 34 stores in Europe, with a long runway for further store expansion. And I'd like to specifically remind everyone that we will open a significant store on Paris' renowned Champs Elysées in 2014.
Tiffany's other sales nearly doubled in the fourth quarter and rose 41% in the full year. As most of you know, through a venture with Damas jewelers, we converted 5 Tiffany stores in the United Arab Emirates, 3 in Dubai and 2 in Abu Dhabi, from wholesale distribution to company-operated locations in the second quarter and began recording retail sales of those stores. We have fully renovated our major store in The Dubai Mall to the latest Tiffany standards and design and have increased inventory assortments and marketing activities. We're encouraged with initial results and excited about the prospects for substantial long-term growth in that important region.
Let's wrap up the regional sales review with sales productivity in company-operated stores. With 4% worldwide sales growth and 6% square footage growth, there were pretty insignificant changes in overall and regional productivity. On a worldwide basis, sales per gross square foot remained at approximately $3,000 in 2012. By region, productivity was highest in the Asia-Pacific region at $4,500, but down from $4,700 in 2011; followed by Japan at $4,200, which was up from $4,100 in 2011; to Europe at $3,200, which was down from $3,400 in 2011; and then the Americas region, which was unchanged at $2,300.
Beyond stores, Tiffany now offers products on its websites in 13 countries. Those combined sales represented 6% of total worldwide sales or 8% of sales in the countries in which they are operated, which was consistent with the prior year. We also have non-commerce informational sites in 5 additional countries. And as we've said repeatedly, our websites play an important role in our marketing communication to enhance brand and product awareness and drive store traffic.
Turning to a few merchandising highlights for 2012. We saw our sales mix continue to evolve toward mid- to higher-priced products, reflecting our strategic initiative for a number of years to elevate the Tiffany & Co. brand. Most product categories performed relatively close to our 4% worldwide sales growth, but for a variety of reasons, the relatively weaker category was in silver jewelry especially at price points below $500.
Looking at some specific examples. Engagement jewelry sales were generally in line with overall company sales growth in 2012. We were encouraged with the successful, albeit limited, introduction of the Harmony engagement collection in Japan, which is now being rolled out worldwide. We were also pleased with the continued success of our yellow diamond collection, the new Enchant diamond jewelry collection and our reintroduced 1837 collection with the new RUBEDO metal.
But as I just mentioned, the sterling silver jewelry category at entry-level price points under $500 has lagged overall company sales growth. That is partly due to an ongoing brand strategy that has primarily focused our product development and marketing on mid- to higher-priced categories and likely also reflects pressure on the more economically-sensitive silver jewelry purchaser. Mike will talk a bit more about plans for that category in his remarks.
Designer jewelry sales rose in the year, reflecting the extraordinary designs of Elsa Peretti, such as her beautifully classic Diamonds by the Yard collection; and Paloma Picasso, with her new Villa Paloma and Venezia collections.
For a quantitative look at product categories sales mix by geography for 2012, please refer to the updated chart in our report on Form 10-K that will be available soon.
That concludes my comments, so I'm now pleased to turn the call over to Pat McGuiness.
Patrick F. McGuiness
Thanks, Mark, for that comprehensive sales overview. Before I review the rest of the earnings statement and balance sheet, let's look at 2013's expectations, starting with sales.
In our holiday sales announcement, we've indicated that we would plan sales growth conservatively for 2013, and we think we have done just that. In addition, while year-over-year comparisons will be far less daunting compared to last year, there is still plenty of global economic uncertainty that leads us to maintain a cautious outlook at this time. We are planning worldwide sales to increase by 6% to 8% in dollars.
On a constant-exchange-rate basis, this will be a high-single-digit percentage increase with total sales growth in all regions. Sales growth ranges from a mid-teens percentage sales increase in Asia-Pacific to a low-single-digit percentage increase in Japan. The only meaningful effect on sales that we expect from foreign currency translation in 2013 will be in Japan. We are projecting the yen to average JPY 93 to $1 for 2013 versus an average of JPY 81 in 2012, leading to a 15% negative effect from translation.
While we hedge our transaction exposure to a weakening yen, as it relates to a portion of inventory purchases made by Japan, we do not hedge any translation exposure. This will have a negative effect on sales and earnings and has been appropriately factored into our guidance. Therefore, the low-single-digit planned sales growth in yen will equate to a low-teens decline when translated and reported in U.S. dollars.
Tiffany's gross margin underperformed our initial expectations in 2012, although we were encouraged that the margin in the fourth quarter began to show some improvement. In the fourth quarter, gross margin of 59.1% was 1.3 points lower than last year's 60.4%. The decline resulted from several factors, including the continuation of product sales mix skewed towards higher-price-point products, which achieved lower gross margin, unfavorable but diminishing higher product input costs and reduced leverage on the fixed expenses. For the same reasons with varying degrees, the full year gross margin of 57% was below last year's 59%.
The product input costs to which I'm referring reflect the slow inventory flow-through of higher commodity costs incurred over the past 1 to 2 years which have since moderated and stabilized. At the same time, we exhibited pricing restraint by not taking any meaningful increases in 2012 and, as such, did not fully mitigate commodity cost pressures. We have recently been taking price increases around the world to alleviate pressure on gross margin in 2013. We expect gross margin in 2013 to be modestly below 2012 as we expect to continue to experience a shift in product sales mix toward higher-priced, lower-margin categories.
Selling, general and administrative expenses were well controlled throughout 2012. The majority of SG&A expenses continue to be fixed in nature. SG&A expense rose 2% in the full year but increased 5% when excluding $43 million of nonrecurring costs in 2011 related to the relocation of our New York headquarters staff. The 5% increase was due to store occupancy costs related to new and existing stores, increased marketing spending and higher labor costs that was partially offset by substantially lower incentive compensation.
In the fourth quarter, SG&A expenses rose only 2%, resulting in 0.7-point improvement in the expense ratio. We are planning mid-single-digit SG&A expense growth in 2013. This largely reflects costs related to the 15 new stores we plan to open this year and annualizing costs of the 28 locations added in 2012.
Primarily due to the gross margin pressure experienced in 2012, Tiffany's operating margin declined to 18.4% for the full year compared with last year's 19.4% on a GAAP basis and 20.6%, which excluded nonrecurring costs in 2011. The operating margin of 23.5% in the fourth quarter was down from last year's 24.1% margin.
For 2013, we expect the modest decline in gross margin to be offset by an improvement in the expense ratio, resulting in Tiffany's operating earnings growing in line with sales. We still believe that there is considerable opportunity to improve the operating margin over the longer term, returning to previous peak levels and beyond by leveraging stronger sales growth against a largely fixed expense base.
Other expenses, net, increased to $14 million in the fourth quarter and $54 million in the full year from $13 million and $43 million in last year's fourth quarter and full year. This largely reflected increased interest expense tied to higher average long-term debt borrowings. During the year, we took advantage of favorable interest rates and borrowed $250 million of 30-year long-term debt, with principal payments beginning in 10 years at an interest rate of 4.4%. We applied $60 million of the proceeds towards 6.56% maturing long-term debt, and the remainder is for working capital and general corporate purposes. We are estimating other expenses at approximately $58 million in 2013.
Tiffany's effective tax rates were 35% in the fourth quarter versus 34.5% last year and 35.3% in the full year compared to 34% in the full year of 2011. We are estimating an effective tax rate of approximately 35% in 2013.
Looking at the bottom line. When we reported holiday sales results in January, we projected that EPS would likely be at the low end of our previous guidance of $3.20 to $3.40 per diluted share. Consistent with that guidance, net earnings in the full year were $3.25 per diluted share. This compared with $3.40 per diluted share in 2011 and $3.60 when excluding nonrecurring costs related to the relocation of our New York headquarters staff in June 2011. In that holiday sales announcement, we also indicated that we were targeting earnings growth of 6% to 9% in 2013. Based on the 2013 assumptions that I mentioned, our finalized plan meets that target with EPS at $3.43 to $3.53 per diluted share from operations.
I want to point out that we expect net earnings to decline approximately 15% to 20% in the first quarter due to some continued but diminishing gross margin pressure and higher marketing-related costs from a major event. However, absent those pressures in subsequent quarters, we expect net earnings growth in the second, third and fourth quarters. In addition, this forecast excludes $0.05 per diluted share of expected first quarter charges for staffing and occupancy adjustments.
Despite the overall sales shortfall in 2012, we achieved most of our balance sheet objectives for the year and are planning for solid free cash flow generation in 2013.
We initially planned for a 15% increase in net inventories in 2012. As the year progressed, we moderated our inventory plans due to a lower-than-expected sales growth and projected a 10% inventory increase. I'm pleased to say that net inventories of $2.2 billion at yearend were up 8% for the full year. Finished goods inventory rose 13% in the year, primarily due to the addition of stores and new products which included a meaningful expansion of our statement jewelry assortment. Combined raw material and work-in-process inventories rose only 2% in the year. We are projecting net inventories to increase approximately 5% in 2013 due to similar rates of growth in all stages of inventories.
Accounts receivables declined 5% in the year despite the 4% sales increase, primarily due to the translation effects from the weakening Japanese yen in the latter part of 2012. Capital expenditures of $220 million in 2012 represented 6% of sales, which is indicative of our long-term CapEx run rate. This was a modest decrease from the $239 million we spent in 2011. Despite higher spending in 2012 for increased store expansion and renovations, the year-over-year decline reflected costs for relocating our New York headquarters staff in 2011. We are projecting approximately $230 million of CapEx in 2013.
Putting it all together, free cash flow, which we define as cash flow from operating activities minus CapEx, was an inflow of $109 million in 2012 compared with an outflow of $29 million in 2011. The improved cash flow was due to a lower rate of inventory growth. We are planning for positive free cash flow of approximately $300 million in 2013.
At yearend, we had $505 million of cash and cash equivalents compared to $434 million at the previous yearend. Combined short-term and long-term debt of $959 million at January 31, 2013 was up from $712 million at the previous yearend. As I mentioned earlier, we added $250 million of long-term debt during the year and paid off $60 million of maturing long-term debt.
Stockholders' equity rose to $2.6 billion from $2.3 billion a year ago. As a result, total debt was 37% of stockholders' equity versus 30% a year ago. We also returned cash to stockholders in 2012 in 2 ways. Our board approved a 10% increase in the quarterly dividend rate, representing the 11th increase in the past 10 years. The annualized dividend rate of $1.28 per share would represent a 39% payout ratio on 2012's net earnings. We also spent $54 million to repurchase 813,000 shares of common stock in the first half of the year before temporarily suspending purchases to more effectively allocate resources consistent with our growth strategies. The board recently extended the expiration date to January 2014 for the currently authorized program, which has $164 million available for future purchases.
Lastly, 2 additional measurements that are important to us and stockholders are return on average assets, which was 9% in 2012; and return on average stockholders' equity, which was 17% in 2012. Our long-term financial objective is continue to call for achieving at least a 10% ROA and at least a 15% ROE.
We believe that the sales and earnings growth plans that we have constructed for 2013 are achievable and the beginning of a turnaround from our disappointing 2012 results. However, we are not yet back to achieving our long -- longer-term objectives that continue to call for annual 10% to 12% sales growth and at least 15% earnings growth.
I am now pleased to turn the call over to Mike Kowalski.
Michael J. Kowalski
Thanks, Pat and Mark, for your comments. And good morning to everyone.
Clearly, we were not pleased with Tiffany's financial results in 2012, which are not representative of how our company should perform in a more normalized operating environment. We faced more difficult-than-expected comparisons to some very strong sales results in 2012. We dealt with economic conditions in 2012 that were more challenging in some regions. We saw a pronounced softness in sales of entry-level-priced silver jewelry. And overall sales weakness led to a timing lag in realizing the benefit from a moderation in commodity costs.
At the same time, we remain as diligent and focused as ever on maintaining and enhancing the renown of the Tiffany & Co. brand through the strategic management of our product category mix, widening market communications and an expanded global presence through new stores, as well as renovations of select existing stores. And we are confident that investments in recent years in our product supply chain and infrastructure will ensure that we have the capacity to support our longer-term growth.
Strategic management of our product mix has served and will continue to serve to elevate our brand toward mid to higher price points. As we began the celebration of Tiffany's 175th anniversary, our product developments in 2012 continued to focus on higher-price-point opportunities both in gemstone jewelry and our -- in our gold and silver jewelry collections. And of course, we innovated with the beautiful new RUBEDO metal, which is a luminescent alloy composed of copper, gold and silver.
But maintaining the right strategic balance remains critical, and you will see a range of exciting new designs in 2013, including silver -- sterling silver with entry-level price points below $500. New designs in silver and gold are included in our dramatic reinterpretation of Tiffany's iconic Atlas collection debuting later in the year. And as we prepare to celebrate Jazz Age glamour on the occasion of the springtime premier of the movie The Great Gatsby, you'll see new designs in silver, freshwater pearls and onyx in our Ziegfeld jewelry collection, as well as higher-price-point fine jewelry in diamonds and platinum in The Great Gatsby collection. And finally, we'll also expand Tiffany's already-successful Jazz collection.
We are very excited about the worldwide rollout of Tiffany's Harmony engagement ring collection, which enjoyed a very successful exclusive launch in Japan last year. We will, of course, build on the success of our Enchant collection, introduced last year; and our yellow diamonds that have enjoyed great success since being launched 3 years ago. We have just introduced Paloma Picasso's new Olive Leaf jewelry collection inspired by the olive tree as a symbol of peace and prosperity. The collection is being offered in yellow and white gold as well as in silver, with diamonds and a wide variety of colored gemstones. And we were delighted to have reached an agreement with Elsa Peretti last December to ensure that her extraordinary jewelry and tabletop designs will continue to be available exclusively at Tiffany for at least the next 2 decades.
We've spoken before about expanding our statement jewelry assortment, and I'm excited to tell you that a selection of new truly extraordinary pieces will be available next month when we host a select group of Tiffany customers from around the world at our annual Blue Book event in New York. That event will mark the pinnacle of Tiffany's 175th year anniversary celebrations.
Beyond jewelry, we will of course be expanding our leather assortment in 2013, and we just recently introduced a beautiful spring collection of bags and accessories to our stores and websites. And we continue to be delighted with Tiffany's eyewear business through our arrangement with Luxottica, and we will be expanding our successful collections with designs that are inspired by our most popular jewelry collections. And of course, we remain absolutely committed to developing Tiffany's watch business.
Our marketing in 2013 will support new and iconic designs in all of our product categories. Through advertising, events, catalogs and our famous window displays and our engagement ring app, we have been and will continue to make it possible for our customers to engage with Tiffany around the world. And we will debut a redesigned website in the second half of the year that will address overall changes in the digital landscape, including social media and the increased use of mobile devices.
In 2012, we added 28 company-operated locations, which increased our global store base by 11% and our square footage by 6%. This included opening 19 new stores and converting 5 existing locations in the U.A.E. and 4 locations in Canada from wholesale distribution to company-operated stores. In the coming year, we will further expand our global presence when we open 15 new stores and close 1 in Japan, increasing our store base by 5%. We are also focused on renovating a number of existing stores.
In the Americas, we plan to open 5 new stores, including 2 stores in the U.S., in New Jersey's Garden State Plaza and in Cleveland's Eaton Shopping Center; another store in Canada, in the West Edmonton Mall in Alberta; our 10th store in Mexico, in Villahermosa; and our fifth store in Brazil, in Curitiba. And we are excited about the coming relocation this fall of our store on block -- Bloor Street in Toronto to a site one block west that will offer a more elegant and refined environment, with less gross square footage but actually an increased amount of selling space.
We are planning 7 new stores in the Asia-Pacific region. We have 4 stores planned in China, including 1 in Jinan and 1 in Xi'an, which will take us to 26 stores in China. 3 additional locations are slated for elsewhere in the region. We plan to add 3 additional stores in Continental Europe, which will bring us to 37 stores in that region by the end of the year.
Beyond new stores, we believe there are also incremental sales and brand enhancement opportunities to be derived from existing but -- from renovating existing stores. The objective of those renovations is to deliver the very best customer experience by creating retail environments that reflect the heritage of our brand and the evolving aesthetic sensibilities. Store renovations are also excellent opportunities for us to ensure that store layouts are optimally planned and incorporate new sustainable technologies and materials.
We've entered 2013 with considerable enthusiasm. We know that the Tiffany & Co. brand remains strong and is increasingly admired and desired by customers in existing markets and in new markets we enter around the world. The universal desire among consumers for extraordinary product designs, craftsmanship, quality and shopping experience has not diminished and, we believe, in fact, will grow stronger. The Tiffany & Co. brand is very well positioned to serve those growing needs.
That concludes my remarks, and I'll turn the call back over to Mark.
Mark L. Aaron
Thanks, Mike and Pat. That wraps up this conference call. You can listen to a replay on our website or by dialing (888) 203-1112 in the U.S. or (719) 457-0820 outside the U.S. and entering pass code 5483461. If you have any questions, please feel free to call me.
Please also note on your calendars that we expect to report first quarter results on Tuesday, May 28, before the market opens. Thanks for listening.
This concludes today's conference call. You may disconnect your line. Thank you.
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