UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

X		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
		EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 2007.

OR

		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
		EXCHANGE ACT OF 1934

For the transition period from             to                  .

Commission file number: 1-9494

TIFFANY & CO.

(Exact name of registrant as specified in its charter)

Delaware		13-3228013
(State of incorporation)		(I.R.S. Employer Identification No.)
727 Fifth Ave. New York, NY		10022
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:                    (212) 755-8000

Former name, former address and former fiscal year, if changed since last report          .

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   X . No      .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check One).

Large Accelerated filer   X		Accelerated filer		Non-Accelerated filer

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes      . No   X .

APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: Common Stock, $.01 par value, 135,641,832 shares outstanding at the close of business on October 31, 2007.

 
 

PART I - FINANCIAL INFORMATION				PAGE
Item 1.		Financial Statements
		Condensed Consolidated Balance Sheets - October 31, 2007,     January 31, 2007 and October 31, 2006 (Unaudited)		3
		Condensed Consolidated Statements of Earnings - for the three     and nine months ended October 31, 2007 and 2006 (Unaudited) `		4
		Condensed Consolidated Statements of Stockholders’ Equity - for the     nine months ended October 31, 2007 and Comprehensive     Earnings - for the three and nine months ended October 31, 2007     and 2006 (Unaudited)		5
		Condensed Consolidated Statements of Cash Flows - for the nine     months ended October 31, 2007 and 2006 (Unaudited)		6
		Notes to Condensed Consolidated Financial Statements     (Unaudited)		7-12
Item 2.		Management’s Discussion and Analysis of Financial Condition and     Results of Operations		13-21
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		22
Item 4.		Controls and Procedures		23
PART II - OTHER INFORMATION
Item 1A.		Risk Factors		24
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		25
Item 6.		Exhibits		26
		(a) Exhibits

PART I. Financial Information

TIFFANY & CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except per share amounts)

		October 31,				January 31,				October 31,
		2007				2007				2006
ASSETS
Current assets:
Cash and cash equivalents		$	334,850			$	175,008			$	56,933
Short-term investments			56,270				15,500				-
Accounts receivable, less allowances of $7,480, $7,900 and $7,693			168,678				165,594				148,608
Inventories, net			1,345,730				1,146,674				1,247,089
Deferred income taxes			65,377				72,934				78,206
Prepaid expenses and other current assets			91,682				57,460				69,002
Assets held for sale			-				73,474				67,584
Total current assets			2,062,587				1,706,644				1,667,422
Property, plant and equipment, net			757,542				912,143				908,844
Deferred income taxes			115,333				37,368				28,431
Other assets, net			197,636				156,097				167,228
Assets held for sale - noncurrent			-				33,258				38,094
		$	3,133,098			$	2,845,510			$	2,810,019
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings		$	59,843			$	106,681			$	237,447
Current portion of long-term debt			5,552				5,398				6,259
Accounts payable and accrued liabilities			204,579				198,471				210,218
Income taxes payable			95,816				62,979				9,620
Merchandise and other customer credits			67,092				61,511				58,722
Liabilities held for sale			-				17,631				13,293
Total current liabilities			432,882				452,671				535,559
Long-term debt			397,795				406,383				416,863
Pension/postretirement benefit obligations			100,712				84,466				77,573
Deferred gains on sale-leasebacks			144,973				4,944				5,010
Other long-term liabilities			130,463				87,774				84,117
Liabilities held for sale - non current			-				4,377				4,227
Commitments and contingencies
Stockholders’ equity:
Preferred Stock, $0.01 par value; authorized 2,000 shares, none issued and outstanding			-				-				-
Common Stock, $0.01 par value; authorized 240,000 shares, issued and outstanding 135,642, 135,875 and 135,358			1,357				1,358				1,353
Additional paid-in capital			647,405				536,187				510,527
Retained earnings			1,252,525				1,269,940				1,159,044
Accumulated other comprehensive gain (loss), net of tax:
Foreign currency translation adjustments			40,245				11,846				14,948
Deferred hedging (loss) gain			(580	)			2,046				646
Unrealized gain on marketable securities			898				178				152
Net unrealized losses on benefit plans			(15,577	)			(16,660	)			-
Total stockholders’ equity			1,926,273				1,804,895				1,686,670
		$	3,133,098			$	2,845,510			$	2,810,019

See notes to condensed consolidated financial statements.

TIFFANY & CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(in thousands, except per share amounts)

		Three Months Ended								Nine Months Ended
		October 31,								October 31,
		2007				2006				2007				2006
Net sales		$	627,323			$	531,834			$	1,885,614			$	1,601,847
Cost of sales			290,186				244,483				855,036				712,926
Gross profit			337,137				287,351				1,030,578				888,921
Other operating income			105,051				-				105,051				-
Selling, general and administrative expenses			288,403				239,696				793,563				689,455
Earnings from continuing operations			153,785				47,655				342,066				199,466
Other expenses (income), net			2,306				(1,294	)			8,139				7,849
Earnings from continuing operations before income taxes			151,479				48,949				333,927				191,617
Provision for income taxes			51,034				16,324				120,858				70,795
Net earnings from continuing operations			100,445				32,625				213,069				120,822
Loss from discontinued operations, net of tax			(1,555	)			(3,483	)			(27,547	)			(7,394	)
Net earnings		$	98,890			$	29,142			$	185,522			$	113,428
Earnings per share:
Basic
Net earnings from continuing operations		$	0.74			$	0.24			$	1.56			$	0.87
Loss from discontinued operations			(0.01	)			(0.03	)			(0.20	)			(0.06	)
Net earnings		$	0.73			$	0.21			$	1.36			$	0.81
Diluted
Net earnings from continuing operations		$	0.72			$	0.23			$	1.52			$	0.85
Loss from discontinued operations			(0.01	)			(0.02	)			(0.19	)			(0.05	)
Net earnings		$	0.71			$	0.21			$	1.33			$	0.80
Weighted-average number of common shares:
Basic			136,124				136,753				136,452				139,288
Diluted			139,487				138,872				139,943				141,647

See notes to condensed consolidated financial statements.

TIFFANY & CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
AND COMPREHENSIVE EARNINGS
(Unaudited)
(in thousands)

										Accumulated
		Total								Other												Additional
		Stockholders'				Retained				Comprehensive				Common Stock								Paid-in
		Equity				Earnings				Gain (Loss)				Shares				Amount				Capital
Balances, January 31, 2007		$	1,804,895			$	1,269,940			$	(2,590	)			135,875			$	1,358			$	536,187
Implementation effect of FIN No. 48			(4,299	)			(4,299	)			-				-				-				-
Balances, February 1, 2007			1,800,596				1,265,641				(2,590	)			135,875				1,358				536,187
Exercise of stock options and vesting of restricted stock units (“RSUs”)			68,176				-				-				2,790				28				68,148
Tax benefit from exercise of stock options and vesting of RSUs			20,213				-				-				-				-				20,213
Share-based compensation expense			28,464				-				-				-				-				28,464
Issuance of Common Stock under Employee Profit Sharing and Retirement Savings Plan			2,450				-				-				52				1				2,449
Purchase and retirement of Common Stock			(156,234	)			(148,148	)			-				(3,075	)			(30	)			(8,056	)
Cash dividends on Common Stock			(50,490	)			(50,490	)			-				-				-				-
Deferred hedging loss, net of tax			(2,626	)			-				(2,626	)			-				-				-
Unrealized gain on marketable securities, net of tax			720				-				720				-				-				-
Foreign currency translation adjustments, net of tax			28,399				-				28,399				-				-				-
Amortization of net losses on benefit plans, net of tax			1,083				-				1,083				-				-				-
Net earnings			185,522				185,522				-				-				-				-
Balances, October 31, 2007		$	1,926,273			$	1,252,525			$	24,986				135,642			$	1,357			$	647,405

		Three Months Ended								Nine Months Ended
		October 31,								October 31,
		2007				2006				2007				2006
Comprehensive earnings are as follows:
Net earnings		$	98,890			$	29,142			$	185,522			$	113,428
Other comprehensive gain (loss), net of tax:
Deferred hedging loss			(672	)			(9	)			(2,626	)			(2,601	)
Foreign currency translation adjustments			15,443				(1,102	)			28,399				9,667
Unrealized gain (loss) on marketable securities			743				(398	)			720				(527	)
Amortization of net losses on benefit plans			400				-				1,083				-
Comprehensive earnings		$	114,804			$	27,633			$	213,098			$	119,967

See notes to condensed consolidated financial statements.

TIFFANY & CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)

		Nine Months Ended
		October 31,
		2007				2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings		$	185,522			$	113,428
Loss from discontinued operations, net of tax			(27,547	)			(7,394	)
Net earnings from continuing operations			213,069				120,822
Adjustments to reconcile net earnings from continuing operations
to net cash provided by (used in) operating activities:
Gain on sale-leaseback			(105,051	)			-
Gain on sale of investments			(1,564	)			(6,774	)
Depreciation and amortization			92,631				85,447
Excess tax benefits from share-based payment arrangements			(17,971	)			(2,270	)
Provision for inventories			10,639				6,690
Deferred income taxes			(62,950	)			(10,669	)
Provision for pension/postretirement benefits			19,943				18,611
Share-based compensation expense			27,889				24,300
Changes in assets and liabilities:
Accounts receivable			9,469				225
Inventories			(178,579	)			(249,269	)
Prepaid expenses and other current assets			(31,724	)			(39,875	)
Other assets, net			(9,247	)			5,082
Accounts payable and accrued liabilities			12,790				30,369
Income taxes payable			52,198				(48,023	)
Merchandise and other customer credits			5,057				2,120
Other long-term liabilities			250				(9,227	)
Net cash provided by (used in) operating activities			36,849				(72,441	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities and short-term investments			(564,899	)			(147,268	)
Proceeds from sales of marketable securities and short-term investments			522,376				150,278
Proceeds from sale of assets, net			509,035				-
Capital expenditures			(149,325	)			(138,021	)
Notes receivable funded			(7,172	)			(9,728	)
Acquisitions, net of cash acquired			(400	)			-
Other			6,133				1,328
Net cash provided by (used in) investing activities			315,748				(143,411	)
CASH FLOWS FROM FINANCING ACTIVITIES:
(Repayments of) proceeds from short-term borrowings, net			(60,507	)			198,896
Fees and expenses related to new short-term borrowings			-				(87	)
Repayment of long-term debt			(21,455	)			(10,057	)
Repurchase of Common Stock			(156,234	)			(264,115	)
Proceeds from exercise of stock options			68,176				6,694
Excess tax benefits from share-based payment arrangements			17,971				2,270
Cash dividends on Common Stock			(50,490	)			(39,066	)
Net cash used in financing activities			(202,539	)			(105,465	)
Effect of exchange rate changes on cash and cash equivalents			15,905				2,276
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Operating activities			(6,596	)			(11,301	)
Investing activities			(1,020	)			(5,084	)
Net cash used in discontinued operations			(7,616	)			(16,385	)
Net increase (decrease) in cash and cash equivalents			158,347				(335,426	)
Cash and cash equivalents at beginning of year			175,008				391,594
Decrease in cash and cash equivalents of discontinued operations			1,495				765
Cash and cash equivalents at end of nine months		$	334,850			$	56,933

See notes to condensed consolidated financial statements.

TIFFANY & CO. AND SUBSIDIARIES

1.		CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
		The accompanying condensed consolidated financial statements include the accounts of Tiffany & Co. and all majority-owned domestic and foreign subsidiaries (the “Company”). Intercompany accounts, transactions and profits have been eliminated in consolidation. The interim statements are unaudited and, in the opinion of management, include all adjustments (which include only normal recurring adjustments) necessary to present fairly the Company’s financial position as of October 31, 2007 and 2006 and the results of its operations and cash flows for the interim periods presented. The condensed consolidated balance sheet data for January 31, 2007 is derived from the audited financial statements, which are included in the Company’s Report on Form 10-K and should be read in connection with these financial statements. In accordance with the rules of the Securities and Exchange Commission, these financial statements do not include all disclosures required by generally accepted accounting principles.
		The Company’s business is seasonal, with a higher proportion of sales and earnings generated in the fourth quarter of the fiscal year and, therefore, the results of its operations for the three and nine months ended October 31, 2007 and 2006 are not necessarily indicative of the results of the entire fiscal year.
2.		NEW ACCOUNTING STANDARDS
		In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements” which establishes a framework for measuring fair value of assets and liabilities and expands disclosures about fair value measurements. The changes to current practice resulting from the application of SFAS No. 157 relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. Management is currently evaluating the effect that the adoption of this Statement will have on the Company’s financial position and earnings.
		In July 2006, the FASB issued FASB Interpretation (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109” which clarifies the accounting for uncertainty in income tax positions by prescribing a more-likely-than-not recognition threshold for income tax positions taken or expected to be taken in a tax return. FIN No. 48 is effective for fiscal years beginning after December 15, 2006 with the cumulative effect of the change in accounting principle recorded as an adjustment to retained earnings at the beginning of the year. The Company has adopted FIN No. 48 as of February 1, 2007 which resulted in a charge of $4,299,000 to retained earnings as a cumulative effect of an accounting change (see Note 5).
3.		DISCONTINUED OPERATIONS
		Management concluded that Little Switzerland, Inc.’s (“Little Switzerland”) operations did not demonstrate the potential to generate a return on investment consistent with management’s objectives and therefore, during the second quarter of 2007 the Company’s Board of Directors authorized the sale of Little Switzerland. On July 31, 2007, the Company entered into an agreement with NXP Corporation (“NXP”) by which NXP would purchase 100% of the stock of Little Switzerland. The transaction closed on September 18, 2007 for net proceeds of $32,870,000 which excludes payments for existing trade payables owed to the Company by Little Switzerland. The purchase price is subject to customary post-closing adjustments. The Company has agreed to continue to distribute TIFFANY & CO. merchandise through TIFFANY & CO. boutiques maintained in certain LITTLE SWITZERLAND stores post-closing. In addition, the Company has agreed to provide warehousing services to Little Switzerland for a transition period.
		The Company determined that the continuing cash flows from Little Switzerland operations were not significant. Therefore, the results of Little Switzerland are presented as a discontinued operation in the consolidated financial statements for all periods presented. Prior to the reclassification, Little Switzerland’s results had been included within the non-reportable segment Other.

3.		DISCONTINUED OPERATIONS (continued)
		Little Switzerland’s loss before income taxes in the nine months ended October 31, 2007 includes a $54,260,000 pre-tax charge ($22,602,000 after-tax) due to the sale of Little Switzerland. The tax benefit recorded in connection with the charge included the effect of basis differences in the investment in Little Switzerland.
		Summarized statement of earnings data for Little Switzerland is as follows:

		Three Months Ended								Nine Months Ended
		October 31,								October 31,
(in thousands)		2007				2006				2007				2006
Net revenues		$	9,378			$	15,952			$	52,817			$	60,120
Gain (loss) on disposal		$	601			$	-			$	(54,260	)		$	-
Loss from operations			(1,893	)			(3,668	)			(5,401	)			(8,735	)
Income tax expense (benefit)			263				(185	)			(32,114	)			(1,341	)
Loss from discontinued operations, net of tax		$	(1,555	)		$	(3,483	)		$	(27,547	)		$	(7,394	)

Summarized balance sheet data for Little Switzerland is as follows:

		January 31,				October 31,
(in thousands)		2007				2006
Assets held for sale
Inventories, net		$	67,948			$	62,378
Other current assets			5,526				5,206
Property, plant and equipment, net			20,246				18,145
Other assets			13,012				19,949
Total assets held for sale		$	106,732			$	105,678
Liabilities held for sale
Current liabilities		$	17,631			$	13,293
Other liabilities			4,377				4,227
Total liabilities held for sale		$	22,008			$	17,520

4.

INVENTORIES

		October 31,				January 31,				October 31,
(in thousands)		2007				2007				2006
Finished goods		$	928,280			$	772,102			$	878,018
Raw materials			336,182				316,206				308,794
Work-in-process			81,268				58,366				60,277
Inventories, net		$	1,345,730			$	1,146,674			$	1,247,089

LIFO-based inventories at October 31, 2007, January 31, 2007 and October 31, 2006 represented 69%, 72% and 73% of inventories, net, with the current cost exceeding the LIFO inventory value by $127,203,000, $108,501,000 and $95,535,000 at the end of each period.

5.		INCOME TAXES
		The Company adopted FIN No. 48 on February 1, 2007. As a result, the Company recorded a non-cash cumulative transition charge of $4,299,000 as a reduction to the opening retained earnings balance. As of February 1, 2007, the gross amount of unrecognized tax benefits was approximately $40,000,000, including interest and penalties of approximately $8,000,000. As of that date, the total amount of unrecognized tax benefits that, if recognized, would have affected the effective tax rate was approximately $22,500,000. The Company recognizes interest expense and penalties related to unrecognized tax benefits within income tax expense.
		During the nine months ended October 31, 2007, the unrecognized tax benefits were reduced by approximately $5,000,000 to approximately $35,000,000. Accrued interest and penalties during the nine months ended October 31, 2007 was reduced by approximately $5,500,000 to approximately $2,500,000. As of that date, the total amount of unrecognized tax benefits that, if recognized, would have affected the effective tax rate was approximately $12,600,000.
		The Company files income tax returns in the U.S. federal jurisdiction as well as various state and foreign locations. As a matter of course, various taxing authorities regularly audit the Company. The Company’s tax filings are currently being examined by tax authorities in jurisdictions where its subsidiaries have a material presence, including Japan (tax years 2003-2005) and New York City (tax years 2002-2004). Tax years from 2005-present are open to examination in the U.S. and tax years 2003-present are open to examination in various other state and foreign taxing jurisdictions. The Company believes that its tax positions comply with applicable tax law and that it has adequately provided for these matters. However, the audits may result in proposed assessments where the ultimate resolution may result in the Company owing additional taxes. Ongoing audits are in various stages of completion and while the Company does not anticipate any material changes in unrecognized income tax benefits over the next 12 months, future developments in the audit process may result in a change in this assessment.
6.		EARNINGS PER SHARE
		Basic earnings per share is computed as net earnings divided by the weighted-average number of common shares outstanding for the period. Diluted earnings per share includes the dilutive effect of the assumed exercise of stock options and vesting of restricted stock units.
		The following table summarizes the reconciliation of the numerators and denominators for the basic and diluted earnings per share (“EPS”) computations:

		Three Months Ended								Nine Months Ended
		October 31,								October 31,
(in thousands)		2007				2006				2007				2006
Net earnings for basic and diluted EPS		$	98,890			$	29,142			$	185,522			$	113,428
Weighted average shares for basic EPS			136,124				136,753				136,452				139,288
Incremental shares based upon the assumed exercise of stock options and restricted stock units			3,363				2,119				3,491				2,359
Weighted average shares for diluted EPS			139,487				138,872				139,943				141,647

6.		EARNINGS PER SHARE (continued)
		For the three months ended October 31, 2007 and 2006, there were 342,000 and 6,099,000 stock options and restricted stock units excluded from the computations of earnings per diluted share due to their antidilutive effect. For the nine months ended October 31, 2007 and 2006, there were 392,000 and 4,706,000 stock options and restricted stock units excluded from the computations of earnings per diluted share due to their antidilutive effect.
7.		COMMITMENTS AND CONTINGENCIES
		In August 2007, the Company entered into a sale-leaseback arrangement for the land and building housing the TIFFANY & CO. Flagship store in Tokyo’s Ginza shopping district. The Company is leasing back only that portion of the property that it occupied immediately prior to the transaction. In the third quarter of 2007, the Company received proceeds of $327,537,000 (¥38,050,000,000) and the transaction resulted in a pre-tax gain of $105,051,000 and a deferred gain of $75,244,000, which will be amortized in selling, general and administrative (“SG&A”) expenses over a 15-year period. The pre-tax gain represents the profit on the sale of the property in excess of the present value of the minimum lease payments. The lease will be accounted for as an operating lease. The lease expires in 2032; however, the Company has options to terminate the lease in 2022 and 2027 without penalty.
		In October 2007, the Company entered into a sale-leaseback arrangement for the building housing the TIFFANY & CO. Flagship store in London. The Company sold the building for proceeds of $148,628,000 (£73,000,000) and simultaneously entered into a 15-year lease with two 10-year renewal options. The transaction resulted in a deferred gain of $63,961,000, which will be amortized in SG&A expenses over a 15-year period. The lease will be accounted for as an operating lease.
		The Company is party to a credit facility and working capital loan commitment (the “Commitment”) to Tahera Diamond Corporation (“Tahera”), a Canadian diamond mining and exploration company. In consideration of the Commitment, the Company was granted the right to purchase or market all diamonds mined at the Jericho mine. This mine has been developed and constructed by Tahera in Nunavut, Canada (the “Project”). Indebtedness under the Commitment is secured by certain assets of the Project. In September 2007, the Company amended the Commitment to defer the start of principal and interest payments until December 2007. As a result, the Company ceased recording interest income on the Commitment as of the third quarter 2007, since there is uncertainty as to the timing of collection. In September 2007, Tahera recorded an asset impairment charge against the assets of the Project. The estimated fair market value of the Project’s assets (based on discounted cash flows) is greater than the amount outstanding under the Commitment and therefore, management believes that the CDN$48,489,000 (U.S. $50,859,000) receivable from Tahera is not impaired. However, future developments at the Project, including changes in the cost of supplies or in the realizable price of diamonds, may affect the fair value of the Project’s assets and the collectibility of funds borrowed under the Commitment.
8.		EMPLOYEE BENEFIT PLANS
		The Company maintains several pension and retirement plans, as well as provides certain health-care and life insurance benefits.
		Net periodic pension and other postretirement benefit expense included the following components:

		Three Months Ended October 31,
										Other
		Pension Benefits								Postretirement Benefits
(in thousands)		2007				2006				2007				2006
Service cost		$	4,213			$	4,211			$	318			$	(4	)
Interest cost			4,003				3,208				470				191
Expected return on plan assets			(3,418	)			(2,886	)			-				-
Amortization of prior service cost			321				178				(223	)			(382	)
Amortization of net loss			848				817				9				(75	)
Net expense		$	5,967			$	5,528			$	574			$	(270	)

8.

EMPLOYEE BENEFIT PLANS (continued)

		Nine Months Ended October 31,
										Other
		Pension Benefits								Postretirement Benefits
(in thousands)		2007				2006				2007				2006
Service cost		$	13,373			$	12,482			$	953			$	748
Interest cost			11,945				10,306				1,410				1,049
Expected return on plan assets			(10,276	)			(8,774	)			-				-
Amortization of prior service cost			962				534				(670	)			(968	)
Amortization of net loss			2,217				3,139				29				95
Net expense		$	18,221			$	17,687			$	1,722			$	924

9.		SEGMENT INFORMATION
		The Company’s reportable segments are: U.S. Retail, International Retail and Direct Marketing. These reportable segments represent channels of distribution that offer similar merchandise and service and have similar marketing and distribution strategies. The Other channel of distribution includes all non-reportable segments which consist of worldwide sales of businesses operated under trademarks or tradenames other than TIFFANY & CO. Sales in the Other channel primarily represents wholesale sales of diamonds obtained through bulk purchases that are subsequently deemed not suitable for the Company’s needs. In deciding how to allocate resources and assess performance, the Company’s Executive Officers regularly evaluate the performance of its reportable segments on the basis of net sales and earnings from operations, after the elimination of inter-segment sales and transfers.
		Reclassifications were made to the prior year’s segment amounts to conform to the current year presentation and to reflect the revised manner in which management evaluates the performance of segments. Effective with the first quarter of 2007, the Company revised certain allocations of operating expenses between unallocated corporate expenses and earnings (losses) from continuing operations for segments.
		Certain information relating to the Company’s segments is set forth below:

		Three Months Ended								Nine Months Ended
		October 31,								October 31,
(in thousands)		2007				2006				2007				2006
Net sales:
U.S. Retail		$	302,673			$	270,373			$	946,692			$	819,509
International Retail			270,845				221,681				777,875				659,998
Direct Marketing			31,373				30,308				104,772				96,007
Total reportable segments			604,891				522,362				1,829,339				1,575,514
Other			22,432				9,472				56,275				26,333
		$	627,323			$	531,834			$	1,885,614			$	1,601,847
Earnings (losses) from continuing operations*:
U.S. Retail		$	35,974			$	25,107			$	144,189			$	111,222
International Retail			54,909				49,654				177,092				154,874
Direct Marketing			4,616				3,439				26,251				20,705
Total reportable segments			95,499				78,200				347,532				286,801
Other			(6,964	)			(4,477	)			(16,256	)			(10,695	)
		$	88,535			$	73,723			$	331,276			$	276,106

*Represents earnings (losses) from continuing operations before unallocated corporate expenses, other operating income and other expenses, net.

9.		SEGMENT INFORMATION (continued)
		The following table sets forth a reconciliation of the segments’ earnings from continuing operations to the Company’s consolidated earnings from continuing operations before income taxes:

		Three Months Ended								Nine Months Ended
		October 31,								October 31,
(in thousands)		2007				2006				2007				2006
Earnings from continuing operations for segments		$	88,535			$	73,723			$	331,276			$	276,106
Unallocated corporate expenses			(39,801	)			(26,068	)			(94,261	)			(76,640	)
Other operating income			105,051				-				105,051				-
Other (expenses) income, net			(2,306	)			1,294				(8,139	)			(7,849	)
Earnings from continuing operations before income taxes		$	151,479			$	48,949			$	333,927			$	191,617

		Unallocated corporate expenses include certain 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. Unallocated corporate expenses in the third quarter and year-to-date 2007 include the $10,000,000 contribution to The Tiffany & Co. Foundation, a private charitable foundation established by the Company. Other operating income includes the $105,051,000 gain from the sale-leaseback of the land and building housing the TIFFANY & CO. Flagship store in Tokyo’s Ginza shopping district.
10.		SUBSEQUENT EVENT
		On November 15, 2007, the Company’s Board of Directors declared a quarterly dividend of $0.15 per share on its Common Stock. This dividend will be paid on January 10, 2008 to stockholders of record on December 20, 2007.

PART I.		Financial Information
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

Tiffany & Co. is a holding company that operates through its subsidiary companies (the “Company”). The Company’s principal subsidiary, Tiffany and Company, is a jeweler and specialty retailer whose principal merchandise offering is fine jewelry. It 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 channels of distribution are as follows:

•		U.S. Retail includes sales in TIFFANY & CO. stores in the U.S., as well as sales of TIFFANY & CO. products through business-to-business direct selling operations in the U.S.;
•		International Retail includes sales in TIFFANY & CO. stores and department store boutiques outside the U.S., as well as business-to-business, Internet and wholesale sales of TIFFANY & CO. products outside the U.S.;
•		Direct Marketing includes Internet and catalog sales of TIFFANY & CO. products in the U.S.; and
•		Other includes worldwide sales of businesses operated under trademarks or tradenames other than TIFFANY & CO. (“specialty retail”). Sales in the Other channel primarily represents wholesale sales of diamonds obtained through bulk purchases that are subsequently deemed not suitable for the Company’s needs.

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

Highlights

•		Net sales increased 18% in both the three months (“third quarter”) and the nine months (“year-to-date”) ended October 31, 2007 due to growth in all channels of distribution.
•		Worldwide comparable store sales increased 9% in the third quarter and 10% in the year-to-date on a constant-exchange-rate basis (see Non-GAAP Measures). Comparable TIFFANY & CO. store sales in the U.S. increased 8% in the third quarter and 13% in the year-to-date. Comparable international store sales increased 10% in the third quarter and 7% in the year-to-date on a constant-exchange-rate basis.
•		Earnings from continuing operations rose to $153,785,000 in the third quarter compared to $47,655,000 in the prior year and to $342,066,000 in the year-to-date compared to $199,466,000 in the prior year. Current year earnings from continuing operations included a pre-tax gain of $105,051,000 from the sale-leaseback of the land and building housing the TIFFANY & CO. Flagship store in Tokyo’s Ginza shopping district. The Company received proceeds of $327,537,000.
•		The Company sold the building housing its flagship store in London for proceeds of $148,628,000 and simultaneously entered into a 15-year lease for the premises.
•		The Company completed the sale of Little Switzerland, Inc. (“Little Switzerland”) for net proceeds of $32,870,000.
•		The Company repurchased and retired 1.9 million and 3.1 million shares of its Common Stock during the third quarter and year-to-date of 2007.
•		In August 2007, the Board of Directors increased the annual divided rate by 25%, representing the second increase of the year.
•		The Company re-launched its website with enhanced graphics and functionality.

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 international 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 measure 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:

		Third Quarter 2007 vs. 2006						Year-to-Date 2007 vs. 2006
				Trans-		Constant-				Trans-		Constant-
		GAAP		lation		Exchange-		GAAP		lation		Exchange-
		Reported		Effect		Rate Basis		Reported		Effect		Rate Basis
Net Sales:
Worldwide		18%		2%		16%		18%		1%		17%
U.S. Retail		12%		-		12%		16%		-		16%
International Retail		22%		4%		18%		18%		2%		16%
Japan Retail		7%		1%		6%		(1)%		(2)%		1%
Other Asia-Pacific		38%		5%		33%		38%		4%		34%
Europe		29%		9%		20%		33%		10%		23%
Comparable Store Sales:
Worldwide		11%		2%		9%		11%		1%		10%
U.S. Retail		8%		-		8%		13%		-		13%
International Retail		14%		4%		10%		9%		2%		7%
Japan Retail		1%		2%		(1)%		(7)%		(3)%		(4)%
Other Asia-Pacific		34%		5%		29%		29%		3%		26%
Europe		23%		9%		14%		26%		10%		16%

RESULTS OF OPERATIONS

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

		Third Quarter								Year-to-Date
		2007				2006				2007				2006
Net sales			100.0	%			100.0	%			100.0	%			100.0	%
Cost of sales			46.3				46.0				45.3				44.5
Gross profit			53.7				54.0				54.7				55.5
Other operating income			16.8				-				5.6				-
Selling, general and administrative expenses			46.0				45.1				42.1				43.0
Earnings from continuing operations			24.5				8.9				18.2				12.5
Other expenses (income), net			0.4				(0.3	)			0.5				0.5
Earnings from continuing operations before income taxes			24.1				9.2				17.7				12.0
Provision for income taxes			8.1				3.1				6.4				4.5
Net earnings from continuing operations			16.0				6.1				11.3				7.5
Loss from discontinued operations, net of tax			(0.2	)			(0.6	)			(1.5	)			(0.4	)
Net earnings			15.8	%			5.5	%			9.8	%			7.1	%

Net Sales
Net sales by channel of distribution were as follows:

		Third Quarter
(in thousands)		2007				2006				Increase
U.S. Retail		$	302,673			$	270,373				12	%
International Retail			270,845				221,681				22	%
Direct Marketing			31,373				30,308				4	%
Other			22,432				9,472				137	%
		$	627,323			$	531,834				18	%

		Year-to-Date
(in thousands)		2007				2006				Increase
U.S. Retail		$	946,692			$	819,509				16	%
International Retail			777,875				659,998				18	%
Direct Marketing			104,772				96,007				9	%
Other			56,275				26,333				114	%
		$	1,885,614			$	1,601,847				18	%

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, sales for a new store or boutique are not included if the store 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.

U.S. Retail sales increased 12% in the third quarter and 16% in the year-to-date as a result of comparable store sales growth of 8% and 13% in those periods and the opening of new stores. Overall sales growth resulted from increases in transactions and in spending per transaction. In the third quarter and year-to-date, the New York Flagship store’s sales increased 25% and 28%, and comparable branch store sales increased 4% and 9%. The New York Flagship store benefited from higher levels of sales to local customers and foreign visitors. Management currently expects a 9% to 10% increase in full year 2007 U.S. comparable store sales.

International Retail sales, on a constant-exchange-rate basis, increased 18% in the third quarter and 16% in the year-to-date. Comparable store sales rose 10% and 7% for those periods.

In Japan (which represents slightly less than half of International Retail sales), on a constant-exchange-rate basis, total retail sales increased 6% in the third quarter and 1% in the year-to-date due to an increase in the average transaction size partly offset by a decrease in unit volume. Comparable store sales on a constant-exchange-rate basis declined 1% in the third quarter and 4% in the year-to-date. The Company will continue to expand and further develop relationships with key customers, introduce new products to the market (particularly silver jewelry) and enhance retail locations through renovation, expansion and relocation.

In the Asia-Pacific region outside Japan, comparable store sales on a constant-exchange-rate basis increased 29% in the third quarter and 26% in the year-to-date due to growth in all markets.

In Europe, comparable store sales on a constant-exchange-rate basis increased 14% in the third quarter and 16% in the year-to-date due to growth in London (which represents more than half of Europe’s sales) and most Continental European markets.

Management continues to expect a high single-digit percentage increase on a constant-exchange-rate basis in full year 2007 International Retail comparable store sales.

Direct Marketing sales rose 4% in the third quarter due to growth in the average order size and 9% in the year-to-date due to growth both in the number of orders shipped and in the average order size. Management currently expects a 10% increase in full year 2007 sales.

Other sales increased in the third quarter and in the year-to-date primarily due to increased wholesale sales of diamonds, which increased from $7,555,000 in the prior year third quarter to $20,022,000 in the third quarter of 2007 and increased from $21,482,000 in prior year-to-date to $49,296,000 in the year-to-date of 2007. Management currently expects an approximately 50% increase in full year 2007 sales.

Management expects to increase the number of Company-operated TIFFANY & CO. stores and boutiques by 11% (net) in 2007. Management’s announced openings and closings of TIFFANY & CO. stores are shown below:

		Actual Openings		Expected Openings
Location		(Closings) 2007		(Closings) 2007
Americas:
Austin, Texas		First Quarter
Natick, Massachusetts		Third Quarter
Las Vegas-Forum Shops, Nevada		Third Quarter
New York-Wall Street, New York		Third Quarter
Santa Barbara, California				Fourth Quarter
Red Bank, New Jersey				Fourth Quarter
Providence, Rhode Island				Fourth Quarter
Maui-Whaler’s Village, Hawaii				(Fourth Quarter)
Mexico City, Mexico		Third Quarter
Japan:
Tokyo-Shibuya, Japan		First Quarter
Tokyo-Shinjuku, Japan		First Quarter
Hiroshima, Japan		First Quarter
Hoshigaoka, Japan		(First Quarter)
Okinawa, Japan		(First Quarter)
Nagoya, Japan		Third Quarter
Other Asia-Pacific:
Changi Airport, Singapore		First Quarter
Seoul, Korea		First Quarter
Kuala Lumpur, Malaysia		Third Quarter
Kowloon Station, Hong Kong		Third Quarter
Macau, China		Third Quarter
Tianjin, China				Fourth Quarter
Europe:
Hamburg, Germany		Second Quarter
London-Selfridges, England		Third Quarter
Bologna, Italy				Fourth Quarter

Gross Margin
Gross margin (gross profit as a percentage of net sales) declined in the third quarter by 0.3 percentage point. The primary component of the net decline was a 1.2 percentage points decline due to increased low-margin wholesale sales of diamonds partly offset by (i) a 0.5 percentage point increase due to selective price increases and changes in sales mix and (ii) a 0.4 percentage point increase due to the leverage effect of fixed product-related costs. Product-related costs include merchandising and distribution costs. Gross margin declined in the year-to-date by 0.8 percentage point primarily due to increased low-margin wholesale sales of diamonds.

Management’s objective is to improve gross margin through greater product manufacturing/sourcing efficiencies (including increased direct rough-diamond sourcing and internal manufacturing), increased use of distribution center capacity, and selective price adjustments to address higher product costs. Management currently expects gross margin to decline a few tenths of a point in full year 2007.

Other Operating Income
In August 2007, the Company entered into a sale-leaseback arrangement for the land and building housing the TIFFANY & CO. Flagship store in Tokyo’s Ginza shopping district. The Company is leasing back only that portion of the property that it occupied immediately prior to the transaction. The transaction resulted in a pre-tax gain of $105,051,000 and a deferred gain of $75,244,000, which will be amortized in selling, general and administrative expenses over a 15-year period.

The pre-tax gain represents the profit on the sale of the property in excess of the present value of the minimum lease payments. The lease will be accounted for as an operating lease.

Selling, General and Administrative (“SG&A”) Expenses
SG&A expenses increased $48,707,000, or 20%, in the third quarter. The Company used proceeds from the sale-leaseback of the land and building housing the TIFFANY & CO. Flagship store in Tokyo’s Ginza shopping district to contribute $10,000,000 to The Tiffany & Co. Foundation, a private charitable foundation established by the Company. Excluding the contribution, SG&A expenses increased $38,707,000, or 16%, primarily due to increased labor and benefit costs of $10,410,000 and increased depreciation and store occupancy expenses of $11,760,000, (both of which are largely due to new and existing stores), as well as an increase of $6,544,000 in marketing expenses. SG&A expenses in the year-to-date increased $104,108,000, or 15%. Excluding the previously mentioned contribution, SG&A expenses in the year-to-date increased $94,108,000, or 14%, largely due to increased labor and benefit costs of $32,168,000 and increased depreciation and store occupancy expenses of $27,044,000, (both of which are largely due to new and existing stores), as well as an increase of $14,382,000 in marketing expenses. SG&A expenses as a percentage of net sales increased by 0.9 percentage point to 46.0% in the third quarter and improved by 0.9 percentage point to 42.1% in the year-to-date of 2007. Excluding the previously mentioned contribution, SG&A expenses as a percentage of net sales improved 0.7 percentage point to 44.4% in the third quarter and by 1.4 percentage points to 41.6% in the year-to-date. Strong sales growth in the third quarter and year-to-date provided for significant leveraging of fixed costs.

Management’s objective is to improve the ratio of SG&A expenses to net sales by controlling expenses so that sales growth can result in a higher rate of earnings growth (leveraging of operating expenses). Management continues to expect an improvement in the expense ratio for the full year 2007.

Earnings from Continuing Operations
Reclassifications were made to prior year’s earnings (losses) from continuing operations by segment to conform to the current year presentation and to reflect the revised manner in which management now evaluates the performance of the segments. Effective with the first quarter of 2007, the Company revised certain allocations of operating expenses between unallocated corporate expenses and earnings (losses) from continuing operations for segments.

		Third Quarter				% of Net				Third Quarter				% of Net
(in thousands)		2007				Sales*				2006				Sales*
Earnings (losses) from continuing operations:
U.S. Retail		$	35,974				12	%		$	25,107				9	%
International Retail			54,909				20	%			49,654				22	%
Direct Marketing			4,616				15	%			3,439				11	%
Other			(6,964	)			(31	%)			(4,477	)			(47	%)
			88,535								73,723
Unallocated corporate expenses			(39,801	)							(26,068	)
Other operating income			105,051								-
Earnings from continuing operations		$	153,785							$	47,655