Exhibit 99.1
NEWS BULLETIN
RE: CLAIRE’S STORES, INC.
2400 WEST CENTRAL ROAD, HOFFMAN ESTATES, ILLINOIS 60192
CLAIRE’S STORES, INC. ANNOUNCES SELECTED PRELIMINARY, UNAUDITED FISCAL 2011
FIRST QUARTER RESULTS
CHICAGO, May 16, 2011. Claire’s Stores, Inc., one of the world’s leading specialty retailers of
fashionable accessories and jewelry at affordable prices for young women, teens, tweens and girls
ages 3 to 27, today announced selected preliminary, unaudited financial results for the 2011 first
quarter, which ended April 30, 2011.
The financial results discussed in this press release regarding selected fiscal 2011 first quarter
results are unaudited and should be considered preliminary and subject to change. The Company does
not currently expect to update this information prior to the release of its first quarter 2011
financial results. The Company expects to hold its regular quarterly conference call after those
results are released.
First Quarter Results
The Company expects to report net sales of $346 million for the 2011 first quarter, an increase of
$24 million, or 7.6%, compared to the 2010 first quarter. The increase was attributable to new
store sales, an increase in same store sales, favorable foreign currency translation effect of our
foreign locations’ sales and increases in shipments to franchisees, partially offset by the effect
of store closures. Net sales would have increased 5.3% excluding the impact from foreign currency
rate changes.
Consolidated same store sales increased 3.2% in the 2011 first quarter. In North America, same
store sales increased 4.8% in the 2011 first quarter. In Europe, same store sales increased 0.1%
in the 2011 first quarter. Our same store sales trend through the first 15 days of the fiscal 2011
second quarter is in the low negative single digits driven primarily by underperformance in our
European Division. We compute same store sales on a local currency basis, which eliminates any
impact from changes in foreign exchange rates.
Adjusted EBITDA in the 2011 first quarter is expected to be between $51 million and $53 million,
compared to $49.2 million in the 2010 first quarter. The Company defines Adjusted EBITDA as
earnings before interest, income taxes, gain from early debt extinguishment, depreciation and
amortization, excluding the impact of transaction-related costs incurred in connection with its May
2007 acquisition and other non-recurring or non-cash expenses, and normalizing occupancy costs for
certain rent-related adjustments. We expect to report operating income for the 2011 first quarter
in the range of $24 million to $26 million, compared to $27.6 million in the 2010 first quarter. A
reconciliation of operating income to Adjusted EBITDA is attached.
At April 30, 2011, cash and cash equivalents were $246 million, including restricted cash of $26
million. The Company’s Revolving Credit Facility continued to be undrawn following the March 2011
paydown from the proceeds of the Senior Secured Second Lien Notes. In addition, during the 2011
first quarter, the Company paid $24 million to retire $10 million of Senior Notes and $14 million
of Senior Toggle Notes.
Adjusted EBITDA
EBITDA and Adjusted EBITDA are not measures of financial performance under U.S. GAAP, are not
intended to represent cash flow from operations under U.S. GAAP and should not be used as an
alternative to net income (loss) as an indicator of operating performance or to cash flow from
operating, investing or financing activities as a measure of liquidity. Management compensates for
the limitations of using EBITDA and Adjusted EBITDA by using it only to supplement our U.S. GAAP
results to provide a more complete understanding of the factors and trends affecting our business.
Each of EBITDA and Adjusted EBITDA has its limitations as an analytical tool, and you should not
consider them in isolation or as a substitute for analysis of our results as reported under U.S.
GAAP.
Management uses Adjusted EBITDA as an important tool to assess our operating performance.
Management considers Adjusted EBITDA to be a useful measure in highlighting trends in our business
and in analyzing the profitability of similar enterprises. Management believes that Adjusted
EBITDA is effective, when used in conjunction with net income
(loss), in evaluating asset performance, and differentiating efficient operators in the industry.
Furthermore, management believes that Adjusted EBITDA provides useful information to potential
investors and analysts because it provides insight into management’s evaluation of our results of
operations. Our calculation of Adjusted EBITDA may not be consistent with “EBITDA” for the purpose
of the covenants in the agreements governing our indebtedness.
While EBITDA and Adjusted EBITDA are frequently used as a measure of operations and the ability to
meet indebtedness service requirements, they are not necessarily comparable to other similarly
titled captions of other companies due to potential inconsistencies in the method of calculation.
Management believes that these measures provide useful information to investors.
Company Overview
Claire’s Stores, Inc. is one of the world’s leading specialty retailers of fashionable accessories
and jewelry at affordable prices for young women, teens, tweens and girls ages 3 to 27. The
Company operates through its two store concepts: Claire’s® Globally and
Icing® in North America. As of April 30, 2011, Claire’s Stores, Inc. operated 3,000
stores in North America and Europe. The Company also franchised or licensed 391 stores in Japan,
the Middle East, Turkey, Russia, Greece, South Africa, Guatemala, Malta and Ukraine. More
information regarding Claire’s Stores is available on the Company’s corporate website at
http://www.clairestores.com.
Preliminary Nature of Results
We have not yet finalized our financial results for our 2011 first quarter ended April 30, 2011.
The preliminary estimated financial results described herein are unaudited and subject to revision
pending the completion of the accounting and financial reporting processes necessary to complete
our financial closing procedures and financial statements for our 2011 first quarter ended April
30, 2011. The foregoing preliminary estimates of our financial results were prepared by management.
Management believes that such preliminary estimates have been prepared on a reasonable basis, and
such preliminary estimates are based upon a number of assumptions, estimates and business decisions
that are inherently subject to significant business fluctuations, economic conditions and
competitive uncertainties and contingencies, many of which are beyond our control, and represent,
to the best of management’s knowledge, our expected results. However, because this information is
preliminary and highly subjective, it should not be relied on as indicative of our future actual
results. We do not intend to update or otherwise revise the preliminary estimates to reflect future
events.
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Forward-looking Statements:
This press release contains “forward-looking statements” which represent the Company’s expectations
or beliefs with respect to future events. Statements that are not historical are considered
forward-looking statements. These forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those anticipated. Those
factors include, without limitation: changes in consumer preferences and consumer spending;
competition; our level of indebtedness; general economic conditions; general political and social
conditions such as war, political unrest and terrorism; natural disasters or severe weather events;
currency fluctuations and exchange rate adjustments; uncertainties generally associated with the
specialty retailing business, such as decreases in mall traffic due to high gasoline prices or
other general economic conditions; disruptions in our supply of inventory; inability to increase
same store sales; inability to renew, replace or enter into new store leases on favorable terms;
increases in the cost of our merchandise; significant increases in our merchandise markdowns;
inability to grow our store base in Europe or expand our international franchising operations;
inability to design and implement new information systems or disruptions in adapting our
information systems to allow for e-commerce sales; delays in anticipated store openings or
renovations; uncertainty that definitive financial results may differ from preliminary financial
results due to, among other things, final U.S. GAAP adjustments; results from any future asset
impairment analysis; changes in applicable laws, rules and regulations, including changes in
federal, state or local regulations governing the sale of our merchandise, particularly regulations
relating to the content in our merchandise, general employment laws, including laws relating to
overtime pay and employee benefits, health care laws, tax laws and import laws; product recalls;
loss of key members of management; increases in the cost of labor; labor disputes; unwillingness of
vendors and service providers to supply goods or services pursuant to historical customary credit
arrangements; increases in the cost of borrowings; unavailability of additional debt or equity
capital; and the impact of our substantial indebtedness on our operating income and our ability to
grow. These and other applicable risks, cautionary statements and factors that could cause actual
results to differ from the Company’s forward-looking statements are included in the Company’s
filings with the SEC, specifically as described in the Company’s Annual Report on Form 10-K for the
fiscal year ended January 29, 2011 filed with the SEC on April 21, 2011. The Company undertakes no
obligation to update or revise any forward-looking statements to reflect subsequent events or
circumstances. The historical results contained in this press release are not necessarily
indicative of the future performance of the Company.
Additional Information:
Note: Other Claire’s Stores, Inc. press releases, a corporate profile and the most recent Form
10-K and Form 10-Q reports are available on Claire’s business website at:
http://www.clairestores.com.
Contact Information:
J. Per Brodin, Executive Vice President and Chief Financial Officer
Phone: (954) 433-3900, Fax: (954) 442-3999 or E-mail, investor.relations@claires.com
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