OVERVIEW

Tiffany & Co. (the "Company") is a holding company that operates through its subsidiary companies. The Company's principal subsidiary, Tiffany and Company, is a jeweler and specialty retailer whose principal merchandise offering is fine jewelry. The Company also sells timepieces, sterling silverware, china, crystal, stationery, fragrances and accessories. Through Tiffany and Company and other subsidiaries, the Company is engaged in product design, manufacturing and retailing activities.

The Company's reportable segments are as follows:

o Americas includes sales in TIFFANY & CO. stores in the United States, Canada and Latin/South America, as well as sales of TIFFANY & CO. products in certain of those markets through business-to-business, Internet, catalog and wholesale operations;

o Asia-Pacific includes sales in TIFFANY & CO. stores in that region, as well as sales of TIFFANY & CO. products in certain markets through business-to-business, Internet and wholesale operations;

o Europe includes sales in TIFFANY & CO. stores in that region, as well as sales of TIFFANY & CO. products in certain markets through business-to-business, Internet and wholesale operations; and

o Other consists of all non-reportable segments. Other consists primarily of wholesale sales of diamonds obtained through bulk purchases that were subsequently deemed not suitable for the Company's needs. In addition, Other includes worldwide sales made by businesses operated under trademarks or trade names other than TIFFANY & CO., such as IRIDESSE, as well as earnings received from third-party licensing agreements.

All references to years relate to fiscal years ended or ending on January 31 of the following calendar year.

HIGHLIGHTS

o Worldwide net sales decreased 22% in the three months ("first quarter") ended April 30, 2009. The lack of consumer confidence and disposable income brought about by the global economic downturn continues to affect sales in most markets. This was also the case in the second half of 2008.

o Worldwide comparable store sales decreased 21% in the first quarter on a constant-exchange-rate basis (see "Non-GAAP Measures" below).

o The Company opened three (net) TIFFANY & CO. retail locations in the first quarter.

o Net earnings decreased 62% to $24,341,000 in the first quarter. Net earnings per diluted share decreased 61% in the first quarter.

o The Company secured additional long-term financing in order to refinance certain maturing debt and to provide for the Company's long-term working capital needs.

NON-GAAP MEASURES

The Company's reported sales reflect either a translation-related benefit from strengthening foreign currencies or a detriment from a strengthening U.S. dollar.

The Company reports information in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). Internally, management monitors its sales performance on a non-GAAP basis that eliminates the positive or negative effects that result from translating international sales into U.S. dollars ("constant-exchange-rate basis").

Management believes this constant-exchange-rate basis provides a more representative assessment of the sales performance and provides better comparability between reporting periods.

The Company's management does not, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The Company presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate the Company's operating results. The following table reconciles sales percentage increases (decreases) from the GAAP to the non-GAAP basis versus the previous year:

                                                              First Quarter 2009 vs. 2008
                                     -------------------------------------------------------------------------------
                                                                                              Constant-Exchange-
                                           GAAP Reported             Translation Effect           Rate Basis
                                     -------------------------------------------------------------------------------
Net Sales:
----------
Worldwide                                     (22)%                         (4)%                    (18)%
Americas                                      (31)%                         (1)%                    (30)%
     U.S.                                     (31)%                           --                    (31)%
Asia-Pacific                                   (9)%                         (2)%                     (7)%
     Japan                                     (7)%                          6 %                    (13)%
     Other Asia-Pacific                       (11)%                        (15)%                      4 %
Europe                                         (8)%                        (26)%                     18 %

Comparable Store Sales:
-----------------------
Worldwide                                     (24)%                         (3)%                    (21)%
Americas                                      (34)%                         (2)%                    (32)%
     U.S.                                     (34)%                           --                    (34)%
Asia-Pacific                                  (10)%                         (1)%                     (9)%
     Japan                                     (6)%                          7 %                    (13)%
     Other Asia-Pacific                       (16)%                        (11)%                     (5)%
Europe                                        (19)%                        (22)%                      3 %

RESULTS OF OPERATIONS
---------------------

Certain operating data as a percentage of net sales were as follows:


                                                                                       First Quarter
                                                                          -----------------------------------------
                                                                                       2009                2008
                                                                          -----------------------------------------
Net sales                                                                             100.0%              100.0%
Cost of sales                                                                          44.4                42.9
                                                                          -----------------------------------------
Gross profit                                                                           55.6                57.1
Selling, general and administrative expenses                                           45.2                41.6
                                                                          -----------------------------------------
Earnings from operations                                                               10.4                15.5
Interest and other expenses, net                                                        2.4                 0.3
                                                                          -----------------------------------------
Earnings from operations before income taxes                                            8.0                15.2
Provision for income taxes                                                              3.3                 5.6
                                                                          -----------------------------------------
Net earnings                                                                            4.7%                9.6%
                                                                          =========================================

Net Sales
---------
Net sales were as follows:
                                                                    First Quarter
                                   ---------------------------------------------------------------------------------
(in thousands)                                    2009                       2008                  Decrease
--------------------------------------------------------------------------------------------------------------------
Americas                              $        258,994              $     373,565                      (31)%

Asia-Pacific                                   201,427                    222,037                       (9)%

Europe                                          55,590                     60,125                       (8)%

Other                                            7,048                     12,422                      (43)%
                                   --------------------------------------------------------------------------------
                                      $        523,059              $     668,149                      (22)%
                                   ================================================================================

Comparable Store Sales. Reference will be made to comparable store sales below. Comparable store sales include only sales transacted in company-operated stores and boutiques. A store's sales are included in comparable store sales when the store has been open for more than 12 months. In markets other than Japan, sales for relocated stores are included in comparable store sales if the relocation occurs within the same geographical market. In Japan (included in the Asia-Pacific segment), sales for a new store or boutique are not included if the store or boutique was relocated from one department store to another or from a department store to a free-standing location. In all markets, the results of a store in which the square footage has been expanded or reduced remain in the comparable store base.

Americas. Total sales in the Americas decreased $114,571,000, or 31%, in the first quarter primarily due to a decline in the number of units sold. Comparable U.S. store sales declined 34%, or $103,444,000, in the first quarter, while non-comparable U.S. store sales grew $4,262,000 in the first quarter. The U.S. comparable store sales decline consisted of a 42% decrease in New York Flagship store sales and a 32% decline in comparable branch store sales. Combined Internet and catalog sales in the U.S. declined 17%, or $5,766,000.

Asia-Pacific. Total sales in Asia-Pacific decreased $20,610,000, or 9%, in the first quarter primarily due to a decline in the number of units sold. Comparable store sales declined 10%, or $21,072,000, in the first quarter. On a constant-exchange-rate basis, Asia-Pacific sales decreased 7% and comparable store sales decreased 9% (consisting of a 13% decline in Japan comparable store sales and a 5% decrease in comparable store sales in countries other than Japan).

Europe. Total sales in Europe decreased $4,535,000, or 8%, in the first quarter primarily due to foreign currency translation, as on a constant-exchange-rate basis, sales increased 18% due to incremental sales from new stores opened during the past 12 months. The overall sales decline consisted of a comparable store sales decline of 19%, or $9,161,000 and a decline of $3,658,000 in e-commerce and other sales, while non-comparable store sales were $8,284,000. On a constant-exchange-rate basis, comparable store sales rose 3%, reflecting growth in the United Kingdom and certain other countries.

Other. Other sales decreased $5,374,000, or 43%, in the first quarter primarily due to lower wholesale sales of diamonds that were deemed not suitable for the Company's needs. This was partly offset by increased sales in IRIDESSE stores. IRIDESSE locations will be closed as agreements are reached with landlords and inventory is sold. Recent liquidation sales at these stores led to the sales increase. Wholesale diamond sales decreased 89% to $1,005,000 in the first quarter.

Store Data. Management expects to open 13 Company-operated TIFFANY & CO. stores and boutiques in 2009, increasing the store base by 6%.

Management's announced openings and closings of TIFFANY & CO. stores are:

                                                                   Actual Openings           Expected Openings
Location                                                           (Closings) 2009            (Closings) 2009
--------------------------------------------------------------------------------------------------------------------
Americas:
    Toronto - Yorkdale Shopping Centre, Canada                      First Quarter
    Guadalajara, Mexico                                             First Quarter
    Roseville, California                                                                      Third Quarter
    Seattle - University Village, Washington                                                   Third Quarter
    Las Vegas, Nevada                                                                          Fourth Quarter
Asia-Pacific:
    Busan - Shinsegae Centum, Korea                                 First Quarter
    Hangzhou, China                                                 First Quarter
    Ikebukuro - Mitsukoshi, Japan                                  (First Quarter)
    Kagoshima - Mitsukoshi, Japan                                                             (Second Quarter)
    Kagoshima - Yamakataya, Japan                                                              Second Quarter
    Canton Road, Hong Kong                                                                     Second Quarter
    Ikebukuro - Seibu, Japan                                                                   Third Quarter
    Seoul - Shinsegae Youngdeungpo, Korea                                                      Third Quarter
    Melbourne - Chadstone Mall, Australia                                                      Fourth Quarter
Europe:
    Amsterdam, Netherlands                                                                     Fourth Quarter

Gross Margin

Gross margin (gross profit as a percentage of net sales) decreased in the first quarter by 1.5 percentage points primarily due to (i) 2.3 percentage points related to higher product costs, partly offset by (ii) a 0.8 percentage point improvement due to a decrease in low margin wholesale sales of diamonds.

The Company adjusts its retail prices from time to time to address specific market conditions, product cost increases and longer-term changes in foreign currencies/U.S. dollar relationships. Among the market conditions that the Company addresses is consumer demand for the product category involved. Consumer demand is influenced by consumer confidence and competitive pricing conditions. The Company uses a limited number of derivative instruments to mitigate foreign exchange and precious metal price exposures (see "Item 1. Notes to Condensed Consolidated Financial Statements - Note 8. Hedging Instruments").

Selling, General and Administrative ("SG&A") Expenses
SG&A expenses decreased $41,358,000, or 15%, in the first quarter, primarily due to (i) decreased labor and benefit costs of $17,529,000 as a result of the staffing reduction initiatives announced during the fourth quarter of 2008 (see "Item 1. Notes to Condensed Consolidated Financial Statements - Note 3. Restructuring Charges"); (ii) decreased marketing expenses of $16,308,000; and
(iii) a decline in variable expenses due to lower sales, all of which more than offset incremental costs of new stores opened in the past 12 months. Changes in foreign currency exchange rates had the effect of decreasing overall SG&A expenses in the first quarter by 3% compared to the prior year. SG&A expenses as a percentage of net sales increased by 3.6 percentage points in the first quarter due to the decline in sales.

Earnings from Operations
------------------------

                                            First Quarter       % of Net          First Quarter          % of Net
(in thousands)                                  2009             Sales*               2008                Sales*
--------------------------------------------------------------------------------------------------------------------
Earnings (losses) from operations:
    Americas                               $     29,469             11.4%       $      68,291               18.3%
    Asia-Pacific                                 47,943             23.8%              56,365               25.4%
    Europe                                        7,820             14.1%              11,574               19.2%
    Other                                        (6,305)           (89.5%)             (4,025)             (32.4%)
                                        ----------------------------------------------------------------------------
                                                 78,927                               132,205
Unallocated corporate expenses                  (24,487)             4.7%             (28,896)               4.3%
                                        ----------------------------------------------------------------------------
Earnings from operations                   $     54,440             10.4%       $     103,309               15.5%
                                        ============================================================================

* Percentages represent earnings (losses) from operations as a percentage of each segment's net sales.

Earnings from operations decreased 47% in the first quarter. On a segment basis, the ratio of earnings (losses) from operations (before the effect of unallocated corporate expenses and other expenses, net) to each segment's net sales in the first quarter of 2009 and 2008 was as follows:

o Americas - the ratio decreased 6.9 percentage points primarily resulting from a decrease in gross margin (due to higher product costs) and a decline in sales which more than offset cost savings from the initiatives implemented at the end of 2008;

o Asia-Pacific - the ratio decreased 1.6 percentage points primarily due to a decrease in gross margin (due to higher product costs), partly offset by reduced operating expenses attributed to the cost savings initiatives;

o Europe - the ratio decreased 5.1 percentage points primarily due to a decrease in gross margin (due to higher product costs) and increased operating expenses (associated with new stores opened over the past 12 months); and

o Other - the increased operating loss is attributable to costs associated with closing the IRIDESSE locations.

Unallocated corporate expenses includes costs related to administrative support functions which the Company does not allocate to its segments. Such unallocated costs include those for information technology, finance, legal and human resources.

Interest and Other Expenses, net

Interest and other expenses, net increased $10,936,000 in the first quarter primarily due to higher interest expense related to increased long-term borrowings.

Provision for Income Taxes

The effective income tax rate for the first quarter of 2009 was 42.0% versus 36.7% in the prior year reflecting differences in the geographical mix of earnings.

2009 Outlook

Uncertainty in the global economic environment has made it more difficult to predict when consumer sentiment with respect to jewelry purchases will improve. In order to plan the Company's expenditures, management's financial performance objectives are based on the following assumptions, which may or may not prove valid, and should be read in conjunction with "Item 1A. Risk Factors" on page 25.

Management's full-year 2009 plan is currently as follows:

o A net sales decline of approximately 11% composed of (i) a mid-teens percentage decrease in the Americas, factoring in a high-teens percentage U.S. comparable sales decline (greater in the first half of the year); (ii) a mid single-digit percentage decrease in Asia-Pacific, which includes a high single-digit comparable sales decline on a constant-exchange-rate basis; (iii) a high single-digit percentage decrease in Europe, with

comparable sales equal to last year on a constant-exchange-rate basis; and (iv) a 20% decrease in Other sales.

o The Company's worldwide expansion strategy is to continue to open Company-operated TIFFANY & CO. stores and boutiques. The Company has moderated the rate of anticipated store openings in 2009 to five in the Americas, seven in Asia-Pacific and one in Europe.

o A three-percentage-point decline in operating margin compared against the prior year (when excluding the non-recurring items in 2008 as discussed in the notes to "Item 6. Selected Financial Data" in the Company's Annual Report on Form 10-K) based upon an expected decline in gross margin and an increase in the ratio of SG&A expenses to net sales.

o This plan includes (i) savings of $60,000,000 resulting from the staff reduction initiatives taken at the end of 2008;
(ii) reduced marketing spending; and (iii) variable and other fixed cost savings.

o Interest and other expenses, net of approximately $50,000,000, which represents an increase from the prior year due to higher interest expense as a result of recent long-term debt issuances.

o An effective tax rate of 37%.

o Net earnings per diluted share of $1.50 - $1.60.

o Net inventories declining by a single-digit percentage.

o Capital expenditures of $100,000,000.

New Accounting Standards

See "Item 1. Financial Statements - Note 2. New Accounting Standards" to condensed consolidated financial statements.

LIQUIDITY AND CAPITAL RESOURCES

The global credit and equity markets have undergone significant disruption, making it difficult for many businesses to obtain financing on favorable terms. The Company has taken steps to address these challenges. First, as noted in the 2009 Outlook section above, management has reduced costs to better align the Company's expenses with the expected sales decline. Secondly, the Company secured $400,000,000 of long-term debt, which consists of $100,000,000 issued in December 2008, $250,000,000 issued in February 2009 and $50,000,000 issued in April 2009 (see "Recent Borrowings" below) to: (i) refinance debt obligations that have come due or are expected to mature over the next year; (ii) use the funds for general corporate purposes; and (iii) provide for financial flexibility in the event that disruptions in the economy or credit markets continue or worsen.

The Company is party to a multibank, multicurrency, committed $450,000,000 unsecured revolving credit facility ("Credit Facility"), and has the option to increase the committed amount to $500,000,000, subject to bank approval. The Credit Facility is intended for working capital and other corporate purposes. There was $68,753,000 outstanding and $381,247,000 available to be borrowed under the Credit Facility at April 30, 2009. The Credit Facility expires in July 2010 and the Company intends to renew the facility.

Management believes that the proceeds from the debt financing that the Company recently issued, other cash on hand, internally-generated cash flows and the funds available under its revolving Credit Facility are sufficient to support the Company's planned worldwide business expansion, debt service, capital expenditures, working capital needs and dividends for the foreseeable future. Based on the Company's business plan for 2009, management expects the Company to generate free cash flow (cash flow from operating activities minus capital expenditures) in excess of $400,000,000.

The following table summarizes cash flows from operating, investing and financing activities:

                                                                                    First Quarter
                                                                  ---------------------------------------------------
(in thousands)                                                                    2009                      2008
---------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in):
  Operating activities                                                 $        41,146           $      (154,565)
  Investing activities                                                         (15,949)                  (27,255)
  Financing activities                                                         115,070                    91,674
Effect of exchange rates on cash and cash equivalents                            3,017                     3,117
                                                                  ---------------------------------------------------
Net increase (decrease) in cash and cash equivalents                   $       143,284           $       (87,029)
                                                                  ===================================================

Operating Activities

The Company's net cash inflow from operating activities of $41,146,000 in the first quarter of 2009 compared with an outflow of $154,565,000 in the same period in 2008. The cash outflow in the first quarter of 2008 was primarily due to increased tax payments and inventory purchases.

Working Capital. Working capital (current assets less current liabilities) and the corresponding current ratio (current assets divided by current liabilities) were $1,758,751,000 and 5.8 at April 30, 2009, compared with $1,446,812,000 and 3.4 at January 31, 2009 and $1,373,639,000 and 3.5 at April 30, 2008.

Accounts receivable, less allowances at April 30, 2009 were 18% lower than at January 31, 2009 and were 30% lower than at April 30, 2008 primarily due to a decline in sales. Changes in foreign currency exchange rates had an insignificant effect on the change in accounts receivable balances compared to January 31, 2009 and April 30, 2008.

Inventories, net at April 30, 2009 were 6% above balances at April 30, 2008 due to new store openings and weak sales trends and were 3% below balances at January 31, 2009 due to steps management has taken to reduce internal manufacturing and purchases from vendors. Changes in foreign currency exchange rates had an insignificant effect on the change in inventories, net compared to January 31, 2009 and decreased inventories, net by 3% compared to April 30, 2008.

Investing Activities

The Company's net cash outflow from investing activities of $15,949,000 in the first quarter of 2009 compared with an outflow of $27,255,000 in the first quarter of 2008. The decreased outflow in the current year is primarily due to lower capital expenditures as a result of the moderated rate of store openings in the current year.

Capital Expenditures. Capital expenditures were $14,685,000 in the first quarter . . .