Tiffany's (TIF) Q4 2014 Results - Earnings Call Transcript

Tiffany & Co. (TIF) Q4 2014 Results Earnings Conference Call March 20, 2015 8:30 AM ET

Executives

Frederic Cumenal - President
Ralph Nicoletti - EVP and CFO
Mark Aaron - VP of IR

Analysts

Operator

Good day, everyone and welcome to the Tiffany & Company Fourth Quarter Conference Call. Today's call is being recorded. Participating on today's call is Mr. Frederic Cumenal, President, Mr. Ralph Nicoletti, Executive Vice President and Chief Financial Officer, and Mr. Mark Aaron, Vice President of Investor Relations.

At this time, I'd like to turn the call over to Mr. Mark Aaron. Please go ahead, sir.

Mark Aaron

Thank you. Greetings from New York, and hello everyone. We reported Tiffany's fourth quarter and full year results this morning and I presume you've already had a chance to review the news release. On today's call, Ralph and I will comment on those results and Tiffany's 2015 plans and outlook. And we are pleased to have Frederic join us, to wrap up the call with some strategic observations.

Before continuing, please note 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.

Okay. Let's begin with an overview of fourth quarter results. Sales performance by region was mostly inline with the holiday sales results we've reported on January 12. Net worldwide sales in the fourth quarter declined 1% but rose 3% on a constant exchange rate basis that excludes the translation effect of the stronger U.S. dollar. We expect to see a continuation of that substantial headwind from the strong dollar in 2015.

In local currencies we were pleased that Tiffany performed well in Europe and Asia Pacific and not surprised that we experienced softness in Japan. However, we were disciplined with the underperformance in the Americas.

Also in the fourth quarter the operating margin was down slightly from last year's margin excluding the charge, while growth margin increased in the quarter the improvement was offset by higher marketing spending and deleveraging of SG&A fixed costs.

Interest and other expenses net were above last year but the prior year included a one time foreign currency transaction gain. The effective tax rate was below last year. So in total net earnings of a $1.51 per diluted share in the fourth quarter was up slightly from last year's $1.47 excluding charges and at the high end of the forecast we provided in January.

For all of 2014, worldwide net sales rose to $4.25 billion. That represented a 5% increase in dollars or a 7% increase on a constant exchange rate basis which was on top of a 10% increase in 2013 on that same basis.

Net earnings for the full year rose 167% to $484 million or $3.73 per diluted share. However, on an apples-to-apples basis excluding charges in both years, net earnings rose 13% and EPS of $4.20 was slightly better than the original guidance of $4.05 to $4.15 that we published at this time a year ago. And that 13% earnings increase in 2014 was on top of the non-GAAP 15% increase in net earnings that we achieved in 2013.

Let's now look at the details of our regional sales performance. First, there were minimal changes in our regional sales mix in 2014. The Americas represented 48% of worldwide net sales in 2014 unchanged from 2013.

Asia Pacific was 24% of worldwide sales, up slightly from 23% a year ago. Japan was 13% down slightly from 14% in 2013, and that was largely due to currency translation and Europe at 12% of worldwide sales was unchanged.

Let's look at the Americas which had a good year but finished on a soft note. On a constant exchange rate basis, both total sales and comp store sales were unchanged in the fourth quarter versus a 7% comp increase last year. However, for the full year on a constant exchange rate basis, total sales and comps rose 6% on top of a 3% comp increase in 2013.

In dollars, total sales in the Americas declined 1% in the quarter due to lower units sold offsetting favorable average price and mix. A 6% sales increase in the full year reflected favorable average price in mix currently offset by jewelry unit declines in silver jewelry under $500.

The strong U.S. dollar had a minimal negative translation effect on the Americas sales but is having an adverse effect on foreign tourists spending in the U.S. especially in New York. And this effect certainly worsened in the later part of 2014.

Foreign tourist spending has historically represented about a quarter of annual U.S. sales. Although we no longer can precisely measure it due to privacy laws in some large markets but we can safely say it is the meaningful portion of the regional sale. And in fact continue to represent more than 40% of sales in the New York flagship store in 2014.

We attribute the Americas comp decline in the fourth quarter to softness that was broad based geographically across the U.S. and in most product categories except fashion jewelry. On a related note, while the Tiffany T collection preformed very well, it is possible that the concentrated advertising focus on that collection may not have benefited other collections as we had expected.

We attribute the softness in the under $500 silver jewelry category to a lack of product newness and marketing focus and perhaps also the competitive and macro pressures on the jewelry purchaser at those price points. So we do have some opportunity to fine tune our approaches to those issues within our control.

Elsewhere in the Americas, we were pleased with solid total sales growth in Canada and Latin America on a constant exchange rate basis in both the fourth quarter and the full year.

We finished the year operating a 122 Tiffany stores in the Americas versus 121 at the end of 2013. During the year we opened three stores in the region on Boston’s Newbury Street, in Florida’s, Aventura mall and in Cancun, Mexico and we closed two small stores in East Hampton, New York, and in the whole ran through department store in Ottawa, Canada. Already in early February, we've opened a stunning store in the new Miami Design District.

Let’s now turn to the Asia Pacific region. On a constant exchange rate basis total sales rose 7% in the quarter and comp rose 3% on top of a 4% comp increase in last years quarter. While the full year, total sales rose 10% and comps rose 4% on top of an 11% comp increase in 2013.

Translated into U.S. dollars, Asia Pacific sales increased 4% in the fourth quarter due to favorable average price in mix partly offset by some unit declines. Sales in the full year rose 9% due to favorable average jewelry pricing mix as well as higher jewelry units sold.

Quarterly sales performance in Asia Pacific on a constant exchange rate basis was led by strong growth in China, Australia and Singapore, partly offset by softness in Hong Kong. While for the full year we were pleased to achieve broad based growth in most countries.

Sales in greater China was a total of 45 stores in China, Hong Kong, Taiwan and Macau continue to represent more than half of Asia Pacific region sales in 2014.

Starting in the third quarter, Tiffany has seen a mark softening in sales results in Hong Kong and we're also experiencing weakness in Macau. We believe that some tourists may be diverting their travels to other markets or perhaps increasing their spending locally.

So we concluded 2014 operating 73 Tiffany stores in the Asia Pacific region versus 72 at the end of the 2013. Opening only one store in this region during the year in Adelaide, Australia is not indicative of our planned rate of annual expansion. However three stores that we have planned to open in the region last year were temporarily delayed.

Two of those stores in China in the MixC mall in Hangzhou, and in the New World Daimaru Department Store in Shanghai have already opened this year. It was certainly a volatile year for us in Japan, dealing with the effect of an increase in the consumption tax on April 1, followed by the effect of a weakening Yen and then an economic recession.

When measured in Yen, total sales in Japan increased 1% in the fourth quarter due to favorability in average pricing mix, mostly offset by decline in jewelry units sold.

For the full year, a 4% total sales increase in Yen was due to favorable price and mix also partly offset by a decline in jewelry units sold. Comp store sales declined 5% in Yen in the quarter versus an 8% increase in last year’s fourth quarter and comps increased 1% for the full year versus a 10% increase in 2013.

So while we definitely had our challenges in Japan in 2014, we believe our two year run rate is respectable.

The Yen weakened 8% on average against the U.S. dollar in 2014 and that's after weakening about 20% on average in 2013.

Therefore when translated into dollars, total sales in Japan declined 13% in the fourth quarter and 4% for the full year. Such a substantial move in the Yen has clearly caused softness and spending by Japanese tourists when they travel but might be supporting some local spending in Japan.

In addition although we have seen a gradual increase in spending by Chinese tourists in Japan, overall spending by foreign tourists visiting Japan is still not yet meaningful for us. During 2014, we opened two stores in Japan in Kobe and in the Shinjuku section of Tokyo and finished the year operating 56 Tiffany stores.

Now turning to Europe, we also faced some macro economic challenges but nonetheless performed well. On a constant exchange rate basis, total sales rose 9% in the fourth quarter led by growth in our three major continental European markets of Germany, Italy, and France and comp store sales rose 4%. Our net basis for the full year total sales rose 6% but comp stores declined 1%.

Sales in the U.K. represented about 40% of total Europe in 2014 and its performance was relatively softer than Continental Europe in both the quarter and full year.

The Euro and the Pound weakened against the U.S. dollar in 2014. Therefore when translated into U.S. dollars, total European sales in the fourth quarter were flat with the prior year with no significant changes in jewelry units sold, price or mix, while conversely for the full year, total sales rose 6% due to similar favorability in jewelry units sold average price and mix.

Those weaker currencies have likely contributed to the attractiveness of shopping in Europe and foreign tourist spending represents approximately a quarter of our European sales.

During 2014, we expanded Tiffany's presence in Paris with the opening of the major store on the important Champs Elysees. The prominent point of location is enjoying a successful first year serving foreign tourists as well as for Asians and it has been important complement to Tiffany's other stores on Rue de La Paix and in the galleries Lafayette and Printemps department stores. We finished the year operating 38 stores in Europe.

Rounding out the geographies is our other segment which primarily consist the retail store sales in the United Arab Emirates and Russia, as well as wholesale diamond sales and some licensing revenues.

In the fourth quarter, other sales increased 12% due to incremental sales from our store that we opened in Moscow in February 2014, while comp store sales declined 8% due to soft demand in the five stores we operate in UAE. Although I should add that this compared with the strong 23% comp increase in last year’s fourth quarter.

For the full year, other sales rose 26% partly due to the Moscow store sales as well as an 8% increase in comp store sales. So in total, we opened eight company operated Tiffany & Co stores in 2014 and closed two.

That net addition of six stores was a 2% increase in our store base and a 3% increase in worldwide square footage. You should also keep in mind that beyond opening new stores we are equally focused on enhancing the quality of our existing store base and as such we will be pursuing a number of relocations and some major renovations in 2015.

We are currently planning to increase our company operated stores by a net of approximately 12 to 15 stores during 2015. A majority of that net addition is planned in Asia Pacific with the balance in the Americas and Europe. In total, this will represent a 4% to 5% net increase in our company operated store base and in worldwide square footage.

Looking at regional sales productivity in 2014, total sales and dollars per growth square foot for company operated stores was unchanged at approximately $3100. By region, the ranking remained unchanged from the prior year with Asia Pacific continuing to rank highest with $5,000 productivity versus $4800 in 2013, followed by Japan at $3400 versus $3800 in 2013, then Europe at $3200 down from $3300 in 2013, to the Americas at $2500 per square foot up from $2400 in 2013.

At this point it's also worth mentioning the effectiveness of Tiffany's omni-channel platform. Our company operated store base as complemented by e-commerce enabled websites in 13 countries and informational sites in several others.

We have a dual objective of generating ecommerce sales growth in each region, but importantly also communicating Tiffany's brand and product message to consumers in order to drive store traffic as well. Total e-commerce sales continue to represent 6% of net worldwide sales in 2014.

There was a noteworthy merchandising highlights in 2014. First, we were pleased to experience growth in all major categories for the year led by growth in our fashion jewelry categories and specifically in gold jewelry.

We also saw a healthy growth in engagement jewelry in 2014, but only modest growth in the statement fine and solitaire category. From a worldwide price stratification perspective there was sales growth in every price strata above $500, up to statement jewelry above $50,000.

Following on the successful launch in 2013 is the exciting reinterpretation of our Atlas collection, our design team created another success with their modern innovative new Tiffany T collection.

Ranging in price from a few hundred dollars to $20,000, the Tiffany T collection is targeted towards stylish female self purchase customers, as well as attracting gift purchasers. And as intended its appeal is global.

Consistent with our brand strategy, it's worth noting that Tiffany T continues our evolution toward introducing compelling designs at higher price points. And in its first few months, is generating the highest ever average transaction size for a new fashion jewelry collection at Tiffany.

On a related note, while both Atlas and Tiffany T incorporate the use of various precious metals, we have seen a clear preference for the gold design. In fact that trend is evidenced throughout the fashion jewelry category, with considerable strength in gold jewelry sales being partly offset by the softness in silver jewelry sales especially in that price strata under $500.

I should also call up the resurgence of our Keys collection originally introduced in 2009 but expanded over the past two years with a beautiful new designs incorporating colored gemstones as well as rose gold.

I mentioned sales growth in the engagement jewelry category, which is led of course by the popularity of our iconic six pronged setting. A strong addition to the engagement category has been the harmony engagement ring, which in just over two years has become our second best selling style in our bridal assortment. And sales of wedding band rings in the engagement category were strong in the year.

Overall our sales growth in the engagement category was led by strength in the Asia Pacific and the Americas regions. The more modest sales increased in fine and solitaire jewelry in 2014 was spread among various collections and designs.

With noteworthy callouts being the classic Victoria collection with new styles added in 2014, and the beautiful Soleste collection, which is diamond-focused and was expanded in 2014 to incorporate greater use of colored stones.

As on aside and a possible explanation for some of the softness in fine and solitaire jewelry sales, especially in the fourth quarter, we've heard anecdotal speculation that strong demand for the Tiffany T collection may have pulled some demand from the fine jewelry category.

Lastly, while there was plenty of activity in high-end statement jewelry in 2014, worldwide sales of that category were about equal to the prior year's level.

I hope you now have a better understanding of Tiffany's top line performance in 2014, and I'm now pleased to turn the call over to Ralph.

Ralph Nicoletti

Thank you, Mark for that comprehensive sales review. Reflecting on 2014, I'd like to highlight a few important points before getting into the specifics.

We are effectively executing our strategies to continue to strengthen and elevate the Tiffany brand. In 2014, we expanded our global footprint in key locations, we strengthened our position in the important fashion jewelry category with the introduction of the Tiffany T collection, and we advanced key product development initiatives for introduction in 2015 and beyond.

We improved gross margin and operating margin, while increasing our investment in marketing. And we strengthened or balance sheet by keeping our inventory growth to a lower rate in sales growth, and we lowered our cost of debt significantly, while extending maturities and generating strong free cash flow.

As we exited 2014, we were clearly facing challenges in 2015 from the strong U.S. dollar. Tourist purchases are expected to continue to be pressured in Americas, gross margin is expected to improve in 2015, but at a lesser rate than in 2014, and negative translation is expected to continue to mute sales and earnings growth.

However, we have the ability to continue to invest in the Tiffany brand and improve our capabilities to continue to deliver value for our shareholders over time.

Now that I've framed that overall message, let's take a look at the rest of the components in the earning statement that, excluding charges in 2014 and 2013, contributed to deliver our -- contributed to our delivering the 13% increase in net earnings for the full year.

Gross margin in the year rose 1.6 points to 59.7%, benefiting from favorable product input cost, price increases taken earlier in the year, and a sales mix that moved favorably toward our higher margin fashion jewelry category later in the year.

Gross margin in the fourth quarter was three-tenth of a point higher than the prior year. We're continuing to experience some benefit from favorable product input costs, which we believe will help gross margin in 2015.

From a pricing perspective, the substantial weakening of the yen, euro and pound would normally result in our taking price increases in those regions to fully offset the negative impacts. However, in light of the magnitude of those currency swings and considering local conditions, we are taking only measured price increases in this first quarter. As a result, we expect a modest increase in gross margin in 2015.

Selling, general and administrative expenses increased 6% in the full year, partly due to a combination of higher labor and other store related cost, as well as a substantial increase as expected in marketing spending.

In fact, for the full year, we increased marketing spending to 6.7% of net sales from 6.3% in 2013. SG&A expenses rose only 1% in the fourth quarter as higher marketing spending was mostly offset by the translation effect of the strong U.S. dollar.

I think most of you know that about 80% of our SG&A expenses are fixed in nature. And we have said that we require a mid-single-digit comp store sales increase to gain leverage on those costs. Therefore, our sales growth in 2014 was not sufficient to achieve the leverage on those costs.

Based on our current sales outlook, we expect SG&A expenses will increase at a greater rate than sales growth in 2015. This expected increase in the expense ratio partially reflects our store expansion and marketing plans, but also reflects a meaningful increase of approximately $30 million of non-cash expense resulting from changes in actuarial assumptions, principally reflecting lower interest rates for our U.S. pension and post retiring benefit plans. In fact, that $30 million increase alone restrains EPS growth in 2015 by $0.15 per diluted share.

Operating earnings on a non-GAAP basis declined 3% in the fourth quarter and rose 12% in the full year when excluding the arbitration charge in 2013, as well as a smaller expense in that year related to staffing and occupancy reductions.

The operating margin rose to 21% in the full year 2014 versus an adjusted 19.7% in 2013 and a margin of 18.4% in 2012. Our expectation calls for operating earnings in 2015 to be about equal to the prior year.

As you probably know, we have redeemed $400 million of long-term debt in the third quarter and issued $550 million of debt. This was a significant step in lowering our interest cost and extending maturities.

The net effect of these debt transactions was a $15 million reduction in interest expense, or $3 million to $4 million per quarter, which we began to experience in the fourth quarter, and is incorporated in our full year projection of approximately $50 million of interest and other expense in 2015.

The effective tax rate was 32.9% in the fourth quarter and 34.4% in the full year. The effective tax rates in 2013 were 36.1% in the fourth quarter and 34.8% in the full year, when excluding the charge for the inverse arbitration ruling. We expect the effective tax rate in 2015 to be about equivalent to the rate in 2014.

So, adding it all up, net earnings were $196 million in the fourth quarter and were 3% higher than net earnings of $190 million in last year's fourth quarter, excluding the arbitration related charge.

For the full year, net earnings were $484 million or $3.73 per share, compared with $181 million or $1.41 per diluted share in the prior year. However, excluding those charges in both years, net earnings rose 13% to $545 million or $4.20 per share, up from $481 million or $3.73 per share in 2013.

Our balance sheet was strong at January 31, 2015. Net inventories rose 2% in 2014 to finish the year at $2.4 billion. The overall increase supported new stores, product introductions and expanded offerings, and we were pleased with the level of inventory availability in our stores.

The 2% increase included a 4% increase in finished goods and a 2% decrease in combined raw materials and work in process inventories. Inventories would have grown 6% and still below to the rate of sales growth, excluding the effect of foreign currency translation.

In addition, I believe you all understand that the year-end inventory level was impacted by the unanticipated sales softness in the fourth quarter.

So, whether measured in dollars or on a constant exchange rate basis, both the 2% and 6% increases respectively met our long-term objective to keep growth and inventories below sales growth. Our 2015 plan calls for minimal inventory growth in dollars in the full year.

Accounts receivable rose 3% in 2014 to $195 million, in line with sales growth. Receivables are turning at 21 times per year. Capital expenditures were $247 million in 2014. That was an increase from $221 million in 2013 due to increased spending on systems and internal manufacturing capacity.

CapEx was 6% of worldwide net sales versus 5% in the prior year. Approximately half of our capital spending goes towards store openings, renovations, and relocations. We are forecasting CapEx around $260 million for 2015.

We spent $5 million in the fourth quarter to repurchase 53,000 shares. In the full year, we spent $27 million and bought 301,000 shares at an average cost just under $90 per share. At year end, we had $273 million available for future repurchases under the current authorization that runs through March of 2017.

We believe that share repurchases and dividend growth are appropriate long-term measures to return excess cash to shareholders. Putting it all together, we generated free cash flow of $368 million which included the effect of $61 million after-tax debt extinguishment charge and expect to generate free cash flow exceeding $400 million in 2015.

We finished 2014 with a solid balance sheet and liquidity. Total short term and long-term debt was $1.1 billion with 39% of six stockholders equity versus $1 billion and 37% a year ago.

Tiffany’s return on assets and stockholders equity were 10% and 17% respectively in 2014 and clearly meeting our long-term objectives for at least 10% ROA and a 15% ROE.

Turning to our financial forecasts for 2015, I've already highlighted our assumptions for the operating margin, interest and other expenses and the effective tax rate. In terms of our sales forecast, we believe that taking a cautious view in certain markets is appropriate in light of what we saw in the fourth quarter specifically the strength of the U.S. dollar, as well as challenging conditions in certain markets.

In total we are planning a mid single digit percent increase in worldwide net sales in local currencies which would translate into low single digit increase in dollars for the full year.

While we don’t typically talk about quarterly forecasts, we think you should be aware that we have a very difficult comparison in Japan to a 30% comp increase in last year's first quarter. And we have also continued to experience softness in the Americas, both of which will contribute to a forecasted 10% sales decline in the first quarter on a reported basis in U.S. dollars.

Combined with our assumptions for operating margin interest expense and the effective tax rate, we are forecasting minimal growth in the full year EPS over the $4.20 per share excluding charges that Tiffany earned in 2014.

This was not indicative in any way of Tiffany's long-term earnings power, but it is a reflection of the various near-in macro challenges currently affecting us.

As I mentioned, the expected minimal EPS growth in 2015 incorporates the non-cash increase in employee benefit related expenses costing $0.15 per share or about 4% of earnings growth and of course it’s safe to add that the strong U.S. dollar is costing us a few percentage points of earnings growth. So without those two factors we would have been looking at high single digit increase in EPS.

The change between our original preliminary 2015 guidance that we provided in January calling for low to mid single digit increase in net earnings for the year and our current forecast of minimal earnings growth in 2015, is essentially the result of the added non-cash pension expense and the further strengthening of the U.S. dollar since then.

I would now like to highlight the phasing of our expected sales and earnings in 2015 which will be affected by the strong U.S. dollar, Japan's volatility in 2014 and the timing of marketing spending.

From a quarterly perspective based on the top line challenges in this first quarter, we expect that first quarter EPS could be 30% lower than the $0.97 we’ve earned last year, which had represented a 49% increase over the prior year.

We expect that the second quarter will also show a net earnings decline, but at a more modest rate pressured by the continuation of the strong dollar and substantial marketing spending tied to the watch launch.

And then we expect net earnings to grow by double-digit percentages in both the third and fourth quarters. So just to make it clear, our sales and earnings plan assume progressively improving performance as we move through the year.

In conclusion, I joined Tiffany just about a year ago, since then we’ve been focusing on a number of fronts including but not limited to effectively allocating resources for growth, driving improvements in cost and inventory management, and doing all of this in a tax efficient manner. I’m very excited about our opportunities to grow Tiffany's business in increasingly profitable and productive way.

I presume you all are aware that Tiffany's Chief Executive Officer, Mike Kowalski, will be retiring from Tiffany on March 31, and remain as non-Executive Chairman of the Board. On April 1, Frederic Cumenal, currently Tiffany's President will become CEO.

I am now very pleased to turn the call over to Frederic.

Frederic Cumenal

Thanks Ralph. Thanks Ralph and Mark and good morning everyone. I'm glad to have this opportunity to briefly share with you my thoughts about Tiffany's business and our exciting plan.

First, I believe we achieved good financial results in 2014, but certainly finished the year on a disappointing note primary in the Americas. While we know about the unavoidable challenges rising from the strong US dollar, we can and we’ll be nimble in fine-tuning product developments and marketing communications.

Most important, we have a clear roadmap for the future focused on the store experience, products, marketing, logistics, and margin improvement. I’m pleased with the progress that our company made in 2014 in these areas that I believe will drive our longer term success.

That strategic direction focuses on continued elevation as a global luxury brand. In our stores, we are striving to better engage customers through a more consultative approach and with enhanced visual merchandising presentation.

Over the next couple of years, we would strengthen our abilities when we finish developing a global CRM system and are able to better analyze our customer base and shopping partners.

We opened some major stores in key markets in 2014 and I'm particularly speaking of the new ones in Paris and Moscow. Our strategy includes further investing in our distribution base with new stores likely at the rate of 10 to 15 stores per year when we find the right opportunities, but also enhancing the impressions we create with customers through renovations, relocations, and even some select clothing's.

In 2014, we increased our focus on the stylish female sales purchase customer when we introduced the dramatic and innovative Tiffany T collection, following the successfully debut in 2013 of our reinterpreted Atlas collection.

Our strategy includes launching additional collections in the coming years. But our design group will also be refreshing our product assortments with important new interpretations of our iconic collections.

In April, we will proudly introduce to the world CT-60 a major new collection of watches as the first step in a long-term investment to be a meaningful watch business.

To enhance our growth potential last year, our talented marketing team further developed impactful messages of customer relevance. Operationally, we've continued to expand our capabilities in manufacturing and sourcing, while focused on maximizing the efficiencies of that supply chain, which should enable us to further improve our gross margins in the coming years.

From an IT perspective, we're continuing to invest in new systems to support our long-term objectives. So we enter 2015 with many plans but also with the cautious short-term view regarding the external challenges and uncertainties affecting our business.

We believe that planning for modest sales growth and minimal earning growth is both prudent and justifiable. However, we remain constantly focused on that strategic roadmap I referred you by investing in various facets of our business to achieve healthy results over the long term.

We have made key additions to our management team in the past couple of years both in New York and in our regions which reinforces my confidence and our ability to achieve our long term goal.

Tiffany has accumulated an amazing heritage since its funding 178 years ago. Our roots are here in New York and now we have the opportunity to be relevant and prosper in a world where growing number of affluent customers are seeking finally crafted products and extraordinary experiences.

That concludes my comments. I appreciate your interest in Tiffany and we will now turn the call back to Mark.

Mark Aaron

Thank you, Frederick and Ralph. We hope our remarks on this call have enhanced your understanding of our financial results, plans for the coming year, and longer term direction.

A replay of the call is available on our website or by dialing 888-203-1112 in the U.S. or 719-457-0820 outside the U.S. and entering passcode 8682508. Of course, please always feel free to call me should you have any questions and please note on your calendars that we plan to report our first quarter results on May 27 before the market opens. Thanks for listening.

Operator

This concludes today's conference call. You may disconnect your lines. Thank you.

Question-and-Answer Session

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