Stockholders' Equity and Redeemable Noncontrolling Interests

3 Months Ended

May 04, 2013

Stockholders' Equity and Redeemable Noncontrolling Interests [Abstract]

Stockholders' Equity and Redeemable Noncontrolling Interests

(3) Stockholders’ Equity and Redeemable Noncontrolling Interests

A reconciliation of the total carrying amount of total stockholders’ equity, Guess?, Inc. stockholders’ equity and stockholders’ equity attributable to nonredeemable and redeemable noncontrolling interests for the fiscal year ended February 2, 2013 and three months ended May 4, 2013 is as follows (in thousands):

	Stockholders’ Equity
	Guess?, Inc. Stockholders’ Equity			Nonredeemable Noncontrolling Interests			Total			Redeemable Noncontrolling Interests
Balances at January 28, 2012	$	1,175,630		$	18,635		$	1,194,265		$	8,293
Net earnings	178,744			2,742			181,486			—
Foreign currency translation adjustment, net of income tax of ($13,769)	22,025			322			22,347			65
Loss on derivative financial instruments designated as cash flow hedges, net of income tax of $1,056	(6,041		)	—			(6,041		)	—
Gain on marketable securities, net of income tax of ($85)	139			—			139			—
SERP prior service cost and actuarial valuation gain (loss) and related amortization, net of income tax of ($2,855)	4,613			—			4,613			—
Issuance of common stock under stock compensation plans, net of tax effect	1,362			—			1,362			—
Issuance of stock under ESPP	1,186			—			1,186			—
Share-based compensation	16,285			—			16,285			—
Dividends	(172,792		)	—			(172,792		)	—
Share repurchases	(140,262		)	—			(140,262		)	—
Purchase of redeemable noncontrolling interest	4,857			(4,857		)	—			(4,185		)
Noncontrolling interest capital contribution	—			1,488			1,488			—
Noncontrolling interest capital distribution	—			(4,237		)	(4,237		)	—
Redeemable noncontrolling interest redemption value adjustment	1,246			(217		)	1,029			(1,029		)
Balances at February 2, 2013	$	1,086,992		$	13,876		$	1,100,868		$	3,144
Net earnings	9,916			1,184			11,100			—
Foreign currency translation adjustment, net of income tax of $7,597	(24,766		)	352			(24,414		)	(121		)
Gain on derivative financial instruments designated as cash flow hedges, net of income tax of ($512)	3,700			—			3,700			—
Gain on marketable securities, net of income tax of ($40)	59			—			59			—
SERP prior service cost and actuarial valuation amortization, net of income tax of ($165)	267			—			267			—
Issuance of common stock under stock compensation plans, net of tax effect	1,058			—			1,058			—
Issuance of stock under ESPP	270			—			270			—
Share-based compensation	2,248			—			2,248			—
Dividends	(17,128		)	—			(17,128		)	—
Share repurchases	(22,099		)	—			(22,099		)
Redeemable non-controlling interest redemption value adjustment	(278		)	—			(278		)	278
Balances at May 4, 2013	$	1,040,239		$	15,412		$	1,055,651		$	3,301

Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income (loss), net of related income taxes, for the three months ended May 4, 2013 are as follows (in thousands):

	Foreign currency translation adjustment			Derivative financial instruments designated as cash flow hedges			Marketable securities		SERP			Total
Balances at February 2, 2013	$	10,618		$	(1,782	)	$	110	$	(11,407	)	$	(2,461	)
Gains (losses) arising during the period	(24,766		)	4,088			59		—			(20,619		)
Reclassification to net income for (gains) losses realized	—			(388		)	—		267			(121		)
Net other comprehensive income (loss)	(24,766		)	3,700			59		267			(20,740		)
Balances at May 4, 2013	$	(14,148	)	$	1,918		$	169	$	(11,140	)	$	(23,201	)

Details on reclassifications out of accumulated other comprehensive income (loss) to net income during the three months ended May 4, 2013 are as follows (in thousands):

	Three Months Ended May 4, 2013			Location of (Gain)/Loss Reclassified from Accumulated OCI into Income
Derivative financial instruments designated as cash flow hedges:
Foreign exchange currency contracts	$	(479	)	Cost of sales
Foreign exchange currency contracts	21			Other income/expense
Less income tax effect	70			Income tax expense
	(388		)
SERP:
Actuarial loss amortization	277			(1)
Prior service cost amortization	155			(1)
Less income tax effect	(165		)	Income tax expense
	267
Total reclassifications during the three months ended May 4, 2013	$	(121	)

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(1) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension cost. Refer to Note 12 for further information.

Redeemable Noncontrolling Interests

The Company is party to a put arrangement with respect to the common securities that represent the remaining noncontrolling interest from the acquisition of its majority-owned subsidiary, Guess Sud SAS (“Guess Sud”). The put arrangement for Guess Sud, representing 40% of the total outstanding equity interest of that subsidiary, may be exercised at the discretion of the noncontrolling interest holders by providing written notice to the Company any time after January 30, 2012. The put arrangement is recorded on the balance sheet at its expected redemption value and classified as a redeemable noncontrolling interest outside of permanent equity. On May 15, 2012, the Company and the noncontrolling interest holders executed an amendment to the Guess Sud put arrangement which modified the put price to be based on the value of specified net tangible and intangible assets of Guess Sud instead of being based on a multiple of Guess Sud’s earnings before interest, taxes, depreciation and amortization. The redemption value of the Guess Sud redeemable put arrangement was $3.3 million and $3.1 million at May 4, 2013 and February 2, 2013, respectively.

The Company was previously party to a put arrangement in connection with its now wholly-owned subsidiary, Focus Europe S.r.l. (“Focus”). Under the terms of this put arrangement, which represented 25% of the total outstanding interest of that subsidiary, the noncontrolling interest holder had the option to exercise the put arrangement at its discretion by providing written notice to the Company no later than June 27, 2012. The redemption value of the put arrangement was determined based on a multiple of Focus’s net earnings. In June 2012, the noncontrolling interest holder notified the Company of its intent to exercise the put arrangement. On July 9, 2012, the Company paid $4.2 million to the noncontrolling interest holder to acquire the remaining 25% interest in Focus. This amount was determined based on a multiple of Focus’s net earnings in accordance with the terms of the put arrangement.