On March 26, Tiffany (NYSE:TIF) released fourth-quarter earnings for the period ended Jan. 31.

  • Overall sales increased 14% on a constant currency basis, and same-store sales rose an impressive 8%.
  • Inventories climbed by 15% because of new store openings, wider product assortments, higher metal costs, and expanded diamond sourcing operations.
  • In fiscal 2007, the opening of 17 new Tiffany stores will increase gross square footage by 8%.

(Figures in millions, except per-share data)

Income Statement Highlights

Q4 2006

Q4 2005

Change

Sales

$986.4

$858.4

14.9%

Net Profit

$140.5

$140.3

0.2%

EPS

$1.02

$0.97

5.2%

Diluted Shares

138.3

145.3

(4.8%)



Get back to basics with the income statement.

Margin Checkup

Q4 2006

Q4 2005

Change*

Gross Margin

57.2%

58.8%

(1.6)

Operating Margin

22.8%

23.6%

(0.8)

Net Margin

14.2%

16.3%

(2.1)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q4 2006

Q4 2005

Change

Cash + ST Invest.

$192.0

$393.6

(51.2%)

Accounts Rec.

$169.0

$142.3

18.7%

Inventory

$1,214.6

$1,060.2

14.6%



Liabilities

Q4 2006

Q4 2005

Change

Accounts Payable*

$216.0

$202.6

6.6%

Long-Term Debt

$406.4

$426.5

(4.7%)

*Accounts payable includes accrued liabilities.

The balance sheet reflects the company's health.

Cash Flow Highlights
The company did not include a cash flow statement in its press release. Look for it in the 10-K.

Free cash flow is a Fool's best friend.

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