Strong overall sales growth enabled us to achieve considerable expense leverage in the quarter, improving the ratio from 43.3% in last year’s second quarter to 41.4% this year. Therefore, the operating margin of 14.1% in the quarter was 190 basis points higher than last year’s 12.2%.

Tiffany’s effective tax rate of 28% in the second quarter was lower than 38% a year ago due to an additional 6.6 million tax benefit related to the repatriation provisions of the American Jobs Creation Act of 2004.

We disclosed in our first quarter 10-Q filing that we expected such a tax benefit, which added approximately $0.05 to diluted earnings per share in the quarter. Factoring in this benefit and one from the previous quarter, and a return to a more normal 38% rate for the remainder of the year, Tiffany jewelry full-year tax rate should be approximately 36%.

Adding it all up, net earnings rose by a better than expected 53% in the second quarter, and we’ve been very active in repurchasing shares this year which has led to even higher growth in earnings per share.

I’m now pleased to turn the call over to Jim.

JIM FERNANDEZ, EVP, CFO, TIFFANY & COMPANY: Thanks, Mark, and good morning to everyone.

I’m delighted that Tiffany was able to deliver such solid results for the second quarter. I echo Mark’s satisfaction about progress in Japan and his note of caution that it would be premature to declare a complete recovery there, but we are definitely feeling encouraged.

This second quarter reflected solid earnings growth, progress in improving productivity, and as a result, healthy cash flow to support various initiatives.

Tiffany’s balance sheet remains in very good shape. At July 31st, total debt as a percentage of stockholders equity was 24% compared with 39% a year ago.

In March of this year Tiffany’s board of directors authorized a new share repurchase program for up to $400 million of repurchases over a two-year period. In the second quarter we purchased and retired 1.5 million shares at an average cost of $32.48 per share.

As of July 31st, there was $325 million of remaining authorization under this program.

On a related note, during the second quarter we entered into a new and larger multi-bank revolving credit facility that replaced two previous facilities. With the new facility we now have among other things, flexibility to complete the remaining authorized amount of our share repurchase program.

In terms of improving balance sheet productivity one of our long-term objectives continues to call for at least a 10% return on assets. Improving inventory performance is the key to achieving that ROA return.

As we expected the rate of inventory growth has moderated after substantial growth in the past two years to support a deeper product assortment including larger karat weight and colored diamonds, increased internal manufacturing and the commencement of rough diamond sourcing. Now that those investments have been made we have the opportunity to begin to improve inventory productivity.

Inventories at July 31st were only 3% higher than a year ago and represented the smallest year-over-year growth since 2002. Growth in finished goods inventory was partially offset by a combined decline in raw material and work in process inventories.

Overall, we are at an appropriate inventory level with high in store availability. We continue to plan for mid single-digit percentage inventory increase for the full-year and are well positioned to achieve that goal.

Accounts receivable are also performing efficiently. Receivables at July 31st were up 10% over last year and are turning at an excellent 19 times per year.

We’ve made substantial investments inbuy tiffany earrings infrastructure and product sourcing over the past several years and we’re pleased with the early benefits. Our customer fulfillment center in New Jersey is efficiently processing e-commerce and catalog orders.

buy tiffany cuff links initiative to expand its rough diamond sourcing relationships is enabling us to secure increasing quantities of high quality diamonds and our expanded internal jewelry manufacturing capacity can support our growth for a considerable number of years. These initiatives offer some gross margin benefits as well.

We continually look to rationalize our manufacturing operations and supply chain to ensure that we have the optimal production mix that can support our long-term growth needs in a profitable way.

Our outlook for the remainder of 2005 is based partly on the year-to-date results but also on exciting plans for the coming months. We have a strong lineup of new products being introduced ranging from platinum and diamond jewelry to jewelry with colored stones to gold and silver buy tiffany accessories , and a major new watch collection.

We will be opening three new U.S. stores this fall in San Antonio, Texas, Naples, Florida, and Pasadena, California, and two locations in Japan in September in the new Soga Department Store in Osaka and in the Yokohama Takashimaya store. We also introduced e-commerce in Canada early this month and are planning to launch it in Japan later this year.

And while we are encouraged with the initial improvement in Japan we will continue to vigorously pursue several key initiatives that focus on product development, communications, the quality and appropriate number of stores, and lastly, the important issue of enhancing the customer shopping experience. We believe that all of these initiatives can strengthen our competitive position and sustain longer term growth in that important market.

So now we’re half-way through 2005 and are optimistic about the second half. In this morning’s press release we highlighted our key financial objectives for 2005, but I want to reiterate a few points.

Assuming no major changes in the external environment, we look for a mid to high single-digit comp in the U.S. for the full-year. We also expect flattish comps in local currency in Japan for the full-year which implies positive low single-digit comps in the second half.

We continue to expect gross margin for the full-year to be modestly lower than the prior year, which implies a slight gross margin increase in the second half. We continue to expect the low to mid single-digit SG&A increase for the year which includes a single-digit percentage decline in the fourth quarter due to some large one-time spending items in last year’s fourth quarter.

Adding it all up we believe it is appropriate to revise upward our forecast for annual earnings to a range of $1.55 to $1.65 per diluted share from the previous range of $1.45 to $1.55.