1-11893 | 95-3679695 |
(Commission File Number) | (IRS Employer Identification No.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
99.1 | Press Release of Guess?, Inc. dated August 28, 2013 (financial results for the quarter ended August 3, 2013) |
Dated: August 28, 2013 | GUESS?, INC. | |
By: | /s/ Sandeep Reddy | |
Sandeep Reddy Chief Financial Officer |
Exhibit No. | Description | |
99.1 | Press Release of Guess?, Inc. dated August 28, 2013 (financial results for the quarter ended August 3, 2013) |
• | North American Retail revenues increased 1%; retail comp sales decreased 2% |
• | European revenues increased 1% in U.S. dollars and decreased 3% in local currency |
• | Asian revenues decreased 1% in U.S. dollars and 4% in constant currency |
• | Adjusted operating earnings increased 17%; GAAP operating earnings increased 6% |
• | The Company's retail stores in North America generated revenue of $254.3 million in the second quarter of fiscal 2014, a 0.5% increase from $253.0 million in the same period a year ago. Comparable store sales for the second quarter of fiscal year 2014 decreased 2.0% in U.S. dollars and 1.7% in constant currency compared to the same period a year ago. The Company directly operated 507 retail stores in the United States and Canada at the end of the second quarter of fiscal 2014 versus 511 stores a year earlier. |
• | Net revenue from the Company's Europe segment increased 1.4% to $250.4 million in the second quarter of fiscal 2014, from $246.9 million in the prior-year period. In local currency, net revenue decreased 3.3%. |
• | Net revenue from the Company's Asia segment decreased 1.5% to $65.9 million in the second quarter of fiscal 2014, compared to $66.8 million in the prior-year period. In constant currency, net revenue decreased 3.6%. |
• | Net revenue from the Company's North American Wholesale segment decreased 0.7% to $41.4 million in the second quarter of fiscal 2014, compared to $41.6 million in the prior-year period. |
• | Licensing segment net revenue was slightly up at $27.1 million in the second quarter of fiscal 2014, from $27.0 million in the prior-year period. |
• | The Company's retail stores in North America generated revenue of $492.6 million in the first six months of fiscal 2014, a 2.4% decrease from $504.8 million in the same period a year ago. Comparable store sales decreased 5.9% in U.S. dollars and 5.5% in constant currency for the six months ended August 3, 2013, compared to the six months ended July 28, 2012. |
• | Net revenue from the Company's Europe segment decreased 4.8% to $415.8 million in the first six months of fiscal 2014, compared to $436.7 million in the prior-year period. In local currency, net revenue decreased 7.1%. |
• | Net revenue from the Company's Asia segment increased 4.0% to $137.0 million in the first six months of fiscal 2014, from $131.7 million in the prior-year period. In constant currency, net revenue increased 2.1%. |
• | Net revenue from the Company's North American Wholesale segment was slightly down at $85.2 million in the first six months of fiscal 2014, compared to $85.5 million in the prior-year period. |
• | Licensing segment net revenue increased 2.6% to $57.4 million in the first six months of fiscal 2014, from $55.9 million in the prior-year period. |
• | Consolidated net revenues are expected to range from $2.56 billion to $2.59 billion. |
• | Adjusted operating margin is expected to be between 9.0% and 9.5%; GAAP operating margin is expected to be 8.5% to 9.0%. |
• | Adjusted diluted earnings per share are expected to be in the range of $1.78 to $1.92; GAAP diluted earnings per share are expected to be in the range of $1.70 to $1.84. |
• | Consolidated net revenues are expected to range from $610 million to $620 million. |
• | Operating margin is expected to be between 7.5% and 8.0%. |
• | Diluted earnings per share are expected to be in the range of $0.34 to $0.38. |
Guess?, Inc. and Subsidiaries | ||||||||||||||||||||||||||||
Condensed Consolidated Statements of Income | ||||||||||||||||||||||||||||
(amounts in thousands, except per share data) | ||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||
August 3, 2013 | July 28, 2012 | August 3, 2013 | July 28, 2012 | |||||||||||||||||||||||||
$ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||
Product sales | $ | 611,894 | 95.8 | % | $ | 608,383 | 95.7 | % | $ | 1,130,558 | 95.2 | % | $ | 1,158,749 | 95.4 | % | ||||||||||||
Net royalties | 27,118 | 4.2 | % | 27,010 | 4.3 | % | 57,368 | 4.8 | % | 55,910 | 4.6 | % | ||||||||||||||||
Net revenue | 639,012 | 100.0 | % | 635,393 | 100.0 | % | 1,187,926 | 100.0 | % | 1,214,659 | 100.0 | % | ||||||||||||||||
Cost of product sales | 390,480 | 61.1 | % | 383,833 | 60.4 | % | 741,968 | 62.5 | % | 728,023 | 59.9 | % | ||||||||||||||||
Gross profit | 248,532 | 38.9 | % | 251,560 | 39.6 | % | 445,958 | 37.5 | % | 486,636 | 40.1 | % | ||||||||||||||||
Selling, general and administrative expenses | 181,623 | 28.4 | % | 194,259 | 30.6 | % | 365,387 | 30.7 | % | 390,194 | 32.2 | % | ||||||||||||||||
Restructuring charges | 6,129 | 1.0 | % | — | 0.0 | % | 8,466 | 0.7 | % | — | 0.0 | % | ||||||||||||||||
Earnings from operations | 60,780 | 9.5 | % | 57,301 | 9.0 | % | 72,105 | 6.1 | % | 96,442 | 7.9 | % | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||
Interest expense | (365 | ) | (0.1 | %) | (397 | ) | (0.1 | %) | (914 | ) | (0.1 | %) | (781 | ) | (0.1 | %) | ||||||||||||
Interest income | 475 | 0.1 | % | 815 | 0.1 | % | 809 | 0.1 | % | 1,509 | 0.1 | % | ||||||||||||||||
Other, net | (139 | ) | (0.0 | %) | 5,442 | 0.9 | % | 5,318 | 0.4 | % | 6,010 | 0.6 | % | |||||||||||||||
Earnings before income taxes | 60,751 | 9.5 | % | 63,161 | 9.9 | % | 77,318 | 6.5 | % | 103,180 | 8.5 | % | ||||||||||||||||
Income taxes | 20,048 | 3.1 | % | 20,212 | 3.1 | % | 25,515 | 2.1 | % | 33,018 | 2.7 | % | ||||||||||||||||
Net earnings | 40,703 | 6.4 | % | 42,949 | 6.8 | % | 51,803 | 4.4 | % | 70,162 | 5.8 | % | ||||||||||||||||
Net earnings attributable to noncontrolling interests | 837 | 0.2 | % | 50 | 0.0 | % | 2,021 | 0.2 | % | 617 | 0.1 | % | ||||||||||||||||
Net earnings attributable to Guess?, Inc. | $ | 39,866 | 6.2 | % | $ | 42,899 | 6.8 | % | $ | 49,782 | 4.2 | % | $ | 69,545 | 5.7 | % | ||||||||||||
Net earnings per common share attributable to common stockholders: | ||||||||||||||||||||||||||||
Basic | $ | 0.47 | $ | 0.49 | $ | 0.59 | $ | 0.78 | ||||||||||||||||||||
Diluted | $ | 0.47 | $ | 0.49 | $ | 0.58 | $ | 0.78 | ||||||||||||||||||||
Weighted average common shares outstanding attributable to common stockholders: | ||||||||||||||||||||||||||||
Basic | 84,080 | 86,972 | 84,331 | 88,081 | ||||||||||||||||||||||||
Diluted | 84,347 | 87,237 | 84,563 | 88,384 | ||||||||||||||||||||||||
Adjusted earnings from operations 1: | $ | 66,909 | 10.5% | $ | 80,571 | 6.8% | ||||||||||||||||||||||
Adjusted net earnings attributable to Guess?, Inc. 1: | $ | 44,310 | 6.9% | $ | 56,004 | 4.7% | ||||||||||||||||||||||
Adjusted diluted earnings per common share attributable to common stockholders 1: | $ | 0.52 | $ | 0.66 | ||||||||||||||||||||||||
Notes: | ||||||||||||||||||||||||||||
1 | The adjusted results reflect the exclusion of restructuring charges (and related taxes where applicable) recorded during the three and six months ended August 3, 2013. No adjustments have been made to the prior-year periods. A complete reconciliation of actual results to adjusted results is presented in the table entitled "Reconciliation of GAAP Results to Adjusted Results." |
Guess?, Inc. and Subsidiaries | |||||||||||||||
Reconciliation of GAAP Results to Adjusted Results | |||||||||||||||
(amounts in thousands, except per share data) | |||||||||||||||
The following table provides reconciliations of reported GAAP earnings from operations to adjusted earnings from operations and reported GAAP net earnings attributable to Guess?, Inc. to adjusted net earnings attributable to Guess?, Inc. for the three and six months ended August 3, 2013. | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
August 3, 2013 | August 3, 2013 | ||||||||||||||
% of | % of | ||||||||||||||
$ | Revenues | $ | Revenues | ||||||||||||
Reported GAAP earnings from operations | $ | 60,780 | 9.5% | $ | 72,105 | 6.1% | |||||||||
Restructuring charges 1 | 6,129 | 8,466 | |||||||||||||
Adjusted earnings from operations | $ | 66,909 | 10.5% | $ | 80,571 | 6.8% | |||||||||
Reported GAAP net earnings attributable to Guess?, Inc. | $ | 39,866 | 6.2% | $ | 49,782 | 4.2% | |||||||||
Restructuring charges 1 | 6,129 | 8,466 | |||||||||||||
Income tax adjustments 2 | (1,685 | ) | (2,244 | ) | |||||||||||
Total adjustments affecting net earnings attributable to Guess?, Inc. | 4,444 | 6,222 | |||||||||||||
Adjusted net earnings attributable to Guess?, Inc. | $ | 44,310 | 6.9% | $ | 56,004 | 4.7% | |||||||||
Adjusted diluted earnings per common share attributable to common stockholders: | $ | 0.52 | $ | 0.66 | |||||||||||
Weighted average common shares outstanding attributable to common stockholders: | |||||||||||||||
Basic | 84,080 | 84,331 | |||||||||||||
Diluted | 84,347 | 84,563 | |||||||||||||
Notes: | |||||||||||||||
1 | During the first quarter of fiscal 2014, the Company implemented plans to streamline its operational structure and reduce expenses in both Europe and North America. During the second quarter of fiscal 2014, the Company expanded these plans to include the consolidation and streamlining of its operations in Europe and Asia. These plans resulted in the restructuring charges incurred during the three and six months ended August 3, 2013. No adjustments have been made to the same prior-year periods. | ||||||||||||||
2 | The income tax effect of the restructuring charges was based on the Company's assessment of deductibility using the statutory tax rate of the tax jurisdiction in which the charges were incurred. | ||||||||||||||
Guess?, Inc. and Subsidiaries | ||||||||||||||||||||||||
Consolidated Segment Data | ||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
August 3, | July 28, | % | August 3, | July 28, | % | |||||||||||||||||||
2013 | 2012 | chg | 2013 | 2012 | chg | |||||||||||||||||||
Net revenue: | ||||||||||||||||||||||||
North American Retail | $ | 254,313 | $ | 253,012 | 1% | $ | 492,624 | $ | 504,810 | (2%) | ||||||||||||||
Europe | 250,372 | 246,917 | 1% | 415,764 | 436,732 | (5%) | ||||||||||||||||||
Asia | 65,852 | 66,826 | (1%) | 136,984 | 131,661 | 4% | ||||||||||||||||||
North American Wholesale | 41,357 | 41,628 | (1%) | 85,186 | 85,546 | (0%) | ||||||||||||||||||
Licensing | 27,118 | 27,010 | 0% | 57,368 | 55,910 | 3% | ||||||||||||||||||
$ | 639,012 | $ | 635,393 | 1% | $ | 1,187,926 | $ | 1,214,659 | (2%) | |||||||||||||||
Earnings (loss) from operations: | ||||||||||||||||||||||||
North American Retail | $ | 10,390 | $ | 16,761 | (38%) | $ | 6,157 | $ | 33,751 | (82%) | ||||||||||||||
Europe | 39,275 | 24,622 | 60% | 34,057 | 37,103 | (8%) | ||||||||||||||||||
Asia | 5,039 | 4,019 | 25% | 12,003 | 9,894 | 21% | ||||||||||||||||||
North American Wholesale | 8,478 | 7,701 | 10% | 17,127 | 17,047 | 0% | ||||||||||||||||||
Licensing | 25,101 | 22,869 | 10% | 51,305 | 47,455 | 8% | ||||||||||||||||||
Corporate Overhead | (21,374 | ) | (18,671 | ) | 14% | (40,078 | ) | (48,808 | ) | (18%) | ||||||||||||||
Restructuring Charges | (6,129 | ) | — | (8,466 | ) | — | ||||||||||||||||||
$ | 60,780 | $ | 57,301 | 6% | $ | 72,105 | $ | 96,442 | (25%) | |||||||||||||||
Operating margins: | ||||||||||||||||||||||||
North American Retail | 4.1 | % | 6.6 | % | 1.2 | % | 6.7 | % | ||||||||||||||||
Europe | 15.7 | % | 10.0 | % | 8.2 | % | 8.5 | % | ||||||||||||||||
Asia | 7.7 | % | 6.0 | % | 8.8 | % | 7.5 | % | ||||||||||||||||
North American Wholesale | 20.5 | % | 18.5 | % | 20.1 | % | 19.9 | % | ||||||||||||||||
Licensing | 92.6 | % | 84.7 | % | 89.4 | % | 84.9 | % | ||||||||||||||||
Total Company before restructuring charges | 10.5 | % | 9.0 | % | 6.8 | % | 7.9 | % | ||||||||||||||||
Total Company including restructuring charges | 9.5 | % | 9.0 | % | 6.1 | % | 7.9 | % | ||||||||||||||||
Guess?, Inc. and Subsidiaries | ||||||||||||||||||
Selected Condensed Consolidated Balance Sheet Data | ||||||||||||||||||
(in thousands) | ||||||||||||||||||
August 3, | February 2, | July 28, | ||||||||||||||||
2013 | 2013 | 2012 | ||||||||||||||||
ASSETS | ||||||||||||||||||
Cash and cash equivalents | $ | 343,725 | $ | 329,021 | $ | 271,937 | ||||||||||||
Short-term investments | 5,022 | 6,906 | 9,577 | |||||||||||||||
Receivables, net | 271,826 | 316,863 | 323,388 | |||||||||||||||
Inventories | 400,141 | 369,712 | 381,180 | |||||||||||||||
Other current assets | 108,381 | 84,723 | 96,616 | |||||||||||||||
Property and equipment, net | 341,378 | 355,729 | 348,202 | |||||||||||||||
Other assets | 210,530 | 250,552 | 250,222 | |||||||||||||||
Total Assets | $ | 1,681,003 | $ | 1,713,506 | $ | 1,681,122 | ||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||
Current portion of borrowings and capital lease obligations | $ | 3,015 | $ | 1,901 | $ | 1,720 | ||||||||||||
Other current liabilities | 369,592 | 383,065 | 385,116 | |||||||||||||||
Capital lease obligations | 7,210 | 8,314 | 8,719 | |||||||||||||||
Other long-term liabilities | 207,520 | 216,214 | 219,589 | |||||||||||||||
Redeemable and nonredeemable noncontrolling interests | 19,684 | 17,020 | 15,139 | |||||||||||||||
Guess?, Inc. stockholders' equity | 1,073,982 | 1,086,992 | 1,050,839 | |||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 1,681,003 | $ | 1,713,506 | $ | 1,681,122 |
Guess?, Inc. and Subsidiaries | ||||||||||||||
Condensed Consolidated Cash Flow Data | ||||||||||||||
(in thousands) | ||||||||||||||
Six Months Ended | ||||||||||||||
August 3, | July 28, | |||||||||||||
2013 | 2012 | |||||||||||||
Net cash provided by operating activities | $ | 102,167 | $ | 44,653 | ||||||||||
Net cash used in investing activities | (30,000 | ) | (69,517 | ) | ||||||||||
Net cash used in financing activities | (51,906 | ) | (182,793 | ) | ||||||||||
Effect of exchange rates on cash | (5,557 | ) | (12,211 | ) | ||||||||||
Net change in cash and cash equivalents | 14,704 | (219,868 | ) | |||||||||||
Cash and cash equivalents at the beginning of the year | 329,021 | 491,805 | ||||||||||||
Cash and cash equivalents at the end of the period | $ | 343,725 | $ | 271,937 | ||||||||||
Supplemental information: | ||||||||||||||
Depreciation and amortization | $ | 44,308 | $ | 43,516 | ||||||||||
Rent | $ | 138,150 | $ | 131,079 |
Guess?, Inc. and Subsidiaries | ||||||||||
Retail Store Data | ||||||||||
International Store Count | ||||||||||
As of August 3, 2013 | As of July 28, 2012 | |||||||||
Total | Directly Operated | Total | Directly Operated | |||||||
Region | Stores | Stores | Stores | Stores | ||||||
United States and Canada | 507 | 507 | 511 | 511 | ||||||
Europe and the Middle East | 632 | 257 | 589 | 227 | ||||||
Asia | 474 | 49 | 450 | 47 | ||||||
Central and South America | 86 | 32 | 76 | 26 | ||||||
1,699 | 845 | 1,626 | 811 | |||||||
Guess?, Inc. and Subsidiaries | ||||||||||
Retail Store Data | ||||||||||
U.S. and Canada | ||||||||||
Six Months Ended | ||||||||||
August 3, | July 28, | |||||||||
2013 | 2012 | |||||||||
Number of stores at the beginning of the year | 512 | 504 | ||||||||
Store openings | 5 | 19 | ||||||||
Store closures | (10) | (12) | ||||||||
Number of stores at the end of the period | 507 | 511 | ||||||||
Total store square footage at the end of the period | 2,363,000 | 2,359,000 |