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: | |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | 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 March 18, 2015 (financial results for the quarter and year ended January 31, 2015) |
Dated: March 18, 2015 | GUESS?, INC. | |
By: | /s/ Sandeep Reddy | |
Sandeep Reddy Chief Financial Officer |
Exhibit No. | Description | |
99.1 | Press Release of Guess?, Inc. dated March 18, 2015 (financial results for the quarter and year ended January 31, 2015) |
Exhibit 99.1 |
• | North American Retail revenues decreased 4%; retail comp sales including e-commerce decreased 5% in U.S. dollars and 3% in constant currency |
• | European revenues decreased 16% in U.S. dollars and 5% in constant currency |
• | Asian revenues decreased 9% in U.S. dollars and 7% in constant currency |
• | North American Wholesale revenues decreased 10% in U.S. dollars and 7% in constant currency |
• | Adjusted operating earnings decreased 30%; GAAP operating earnings decreased 29% |
• | Global revenues decreased 6% at $2.4 billion in U.S. dollars; decreased 5% in constant currency |
• | Adjusted operating earnings decreased 46%; GAAP operating earnings decreased 43% |
• | The Company’s retail stores and e-commerce sites in North America generated revenue of $317.0 million in the fourth quarter of fiscal 2015, a 3.7% decrease from $329.0 million in the same period a year ago. Comparable store sales including the results of our e-commerce sites for the fourth quarter of fiscal 2015 decreased 5.0% in U.S. dollars and 3.5% in constant currency compared to the same period a year ago. |
• | Net revenue from the Company’s Europe segment decreased 16.1% to $240.9 million in the fourth quarter of fiscal 2015, from $287.1 million in the prior-year period. In constant currency, net revenue decreased 5.3%. |
• | Net revenue from the Company’s Asia segment decreased 9.1% to $75.4 million in the fourth quarter of fiscal 2015, from $83.0 million in the prior-year period. In constant currency, net revenue decreased 7.0%. |
• | Net revenue from the Company’s North American Wholesale segment decreased 10.2% to $36.6 million in the fourth quarter of fiscal 2015, from $40.8 million in the prior-year period. In constant currency, net revenue decreased 7.2%. |
• | Licensing segment net revenue decreased 5.8% to $26.8 million in the fourth quarter of fiscal 2015, from $28.4 million in the prior-year period. |
• | The Company’s retail stores and e-commerce sites in North America generated revenue of $1.03 billion in fiscal 2015, a decrease of 4.0% from $1.08 billion in the prior year. Comparable store sales including the results of our e-commerce sites for fiscal year 2015 decreased 4.9% in U.S. dollars and 3.6% in constant currency compared to the prior year. |
• | Net revenue from the Company’s Europe segment decreased 8.7% to $825.1 million in fiscal year 2015, from $903.8 million in the prior year. In constant currency, net revenue decreased 6.3%. |
• | Net revenue from the Company’s Asia segment decreased 4.0% to $281.1 million in fiscal year 2015, from $292.7 million in the prior year. In constant currency, net revenue decreased 6.3%. |
• | Net revenue from the Company’s North American Wholesale segment decreased 6.6% to $167.7 million in fiscal year 2015, from $179.6 million in the prior year. In constant currency, net revenue decreased 4.5%. |
• | Licensing segment net revenue decreased 6.0% to $111.1 million in fiscal year 2015, from $118.2 million in the prior year. |
• | Consolidated net revenues are expected to grow between 1 and 2 percentage points in constant currency. Currency headwinds are expected to negatively impact consolidated revenue growth by approximately 9 percentage points, for a net decline between 8 and 7 percentage points. |
• | Operating margin is expected to be between minus 1.5% and minus 1.0% and includes 50 basis points of currency headwind. |
• | Diluted net loss per share is expected to be in the range of $0.06 to $0.03. |
• | Consolidated net revenues are expected to range between a decline of minus 1 percentage point and an increase of 1 percentage point in constant currency. Currency headwinds are expected to negatively impact consolidated revenue growth by approximately 8 percentage points, for a net decline between 9 and 7 percentage points. |
• | Operating margin is expected to be between 4.5% and 5.5% and includes 150 basis points of currency headwind. |
• | Diluted earnings per share are expected to be in the range of $0.75 to $0.95. The estimated impact on earnings per share of the currency headwinds is roughly 50 cents. |
Contact: | Guess?, Inc. | |
Fabrice Benarouche | ||
VP, Finance and Investor Relations | ||
(213) 765-5578 | ||
Source: | Guess?, Inc. | |
Guess?, Inc. and Subsidiaries | ||||||||||||||||||||||||||||
Condensed Consolidated Statements of Income | ||||||||||||||||||||||||||||
(amounts in thousands, except per share data) | ||||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
January 31, 2015 | February 1, 2014 | January 31, 2015 | February 1, 2014 | |||||||||||||||||||||||||
$ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||
Product sales | $ | 669,965 | 96.2 | % | $ | 739,941 | 96.3 | % | $ | 2,306,534 | 95.4 | % | $ | 2,451,580 | 95.4 | % | ||||||||||||
Net royalties | 26,762 | 3.8 | % | 28,422 | 3.7 | % | 111,139 | 4.6 | % | 118,206 | 4.6 | % | ||||||||||||||||
Net revenue | 696,727 | 100.0 | % | 768,363 | 100.0 | % | 2,417,673 | 100.0 | % | 2,569,786 | 100.0 | % | ||||||||||||||||
Cost of product sales | 435,808 | 62.6 | % | 466,414 | 60.7 | % | 1,549,788 | 64.1 | % | 1,593,652 | 62.0 | % | ||||||||||||||||
Gross profit | 260,919 | 37.4 | % | 301,949 | 39.3 | % | 867,885 | 35.9 | % | 976,134 | 38.0 | % | ||||||||||||||||
Selling, general and administrative expenses | 187,753 | 26.9 | % | 197,339 | 25.7 | % | 741,973 | 30.7 | % | 741,105 | 28.9 | % | ||||||||||||||||
Restructuring charges | — | — | % | 2,087 | 0.3 | % | — | — | % | 12,442 | 0.4 | % | ||||||||||||||||
Earnings from operations | 73,166 | 10.5 | % | 102,523 | 13.3 | % | 125,912 | 5.2 | % | 222,587 | 8.7 | % | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||
Interest expense | (477 | ) | (0.1 | %) | (581 | ) | (0.1 | %) | (2,370 | ) | (0.1 | %) | (1,923 | ) | (0.1 | %) | ||||||||||||
Interest income | 362 | 0.1 | % | 403 | 0.1 | % | 1,438 | 0.1 | % | 2,015 | 0.1 | % | ||||||||||||||||
Other, net | 6,897 | 1.0 | % | 1,338 | 0.2 | % | 18,028 | 0.7 | % | 10,280 | 0.4 | % | ||||||||||||||||
Earnings before income tax expense | 79,948 | 11.5 | % | 103,683 | 13.5 | % | 143,008 | 5.9 | % | 232,959 | 9.1 | % | ||||||||||||||||
Income tax expense | 24,359 | 3.5 | % | 32,586 | 4.2 | % | 45,824 | 1.9 | % | 75,248 | 3.0 | % | ||||||||||||||||
Net earnings | 55,589 | 8.0 | % | 71,097 | 9.3 | % | 97,184 | 4.0 | % | 157,711 | 6.1 | % | ||||||||||||||||
Net earnings attributable to noncontrolling interests | 1,660 | 0.3 | % | 1,465 | 0.2 | % | 2,614 | 0.1 | % | 4,277 | 0.1 | % | ||||||||||||||||
Net earnings attributable to Guess?, Inc. | $ | 53,929 | 7.7 | % | $ | 69,632 | 9.1 | % | $ | 94,570 | 3.9 | % | $ | 153,434 | 6.0 | % | ||||||||||||
Net earnings per common share attributable to common stockholders: | ||||||||||||||||||||||||||||
Basic | $ | 0.63 | $ | 0.82 | $ | 1.11 | $ | 1.81 | ||||||||||||||||||||
Diluted | $ | 0.63 | $ | 0.82 | $ | 1.11 | $ | 1.80 | ||||||||||||||||||||
Weighted average common shares outstanding attributable to common stockholders: | ||||||||||||||||||||||||||||
Basic | 84,722 | 84,275 | 84,604 | 84,271 | ||||||||||||||||||||||||
Diluted | 84,924 | 84,596 | 84,837 | 84,522 | ||||||||||||||||||||||||
Adjusted earnings from operations 1: | ||||||||||||||||||||||||||||
$ | 104,610 | 13.6 | % | $ | 235,029 | 9.1 | % | |||||||||||||||||||||
Adjusted net earnings attributable to Guess?, Inc. 1: | ||||||||||||||||||||||||||||
$ | 71,064 | 9.2 | % | $ | 162,471 | 6.3 | % | |||||||||||||||||||||
Adjusted diluted earnings per common share attributable to common stockholders 1: | ||||||||||||||||||||||||||||
$ | 0.83 | $ | 1.91 | |||||||||||||||||||||||||
Notes: | ||||||||||||||||||||||||||||
1 | The adjusted results reflect the exclusion of restructuring charges (and related taxes where applicable) recorded during the three and twelve months ended February 1, 2014. No adjustments have been made to the current-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 twelve months ended February 1, 2014. | |||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||
February 1, 2014 | February 1, 2014 | ||||||||||||||||
% of | % of | ||||||||||||||||
$ | Revenues | $ | Revenues | ||||||||||||||
Reported GAAP earnings from operations | $ | 102,523 | 13.3 | % | $ | 222,587 | 8.7 | % | |||||||||
Restructuring charges 1 | 2,087 | 12,442 | |||||||||||||||
Adjusted earnings from operations | $ | 104,610 | 13.6 | % | $ | 235,029 | 9.1 | % | |||||||||
Reported GAAP net earnings attributable to Guess?, Inc. | $ | 69,632 | 9.1 | % | $ | 153,434 | 6.0 | % | |||||||||
Restructuring charges 1 | 2,087 | 12,442 | |||||||||||||||
Income tax adjustments 2 | (655 | ) | (3,405 | ) | |||||||||||||
Total adjustments affecting net earnings attributable to Guess?, Inc. | 1,432 | 9,037 | |||||||||||||||
Adjusted net earnings attributable to Guess?, Inc. | $ | 71,064 | 9.2 | % | $ | 162,471 | 6.3 | % | |||||||||
Adjusted diluted earnings per common share attributable to common stockholders: | $ | 0.83 | $ | 1.91 | |||||||||||||
Weighted average common shares outstanding attributable to common stockholders: | |||||||||||||||||
Basic | 84,275 | 84,271 | |||||||||||||||
Diluted | 84,596 | 84,522 | |||||||||||||||
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 restructuring charges incurred during the three and twelve months ended February 1, 2014. No adjustments have been made to the same current-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 | Twelve Months Ended | |||||||||||||||||||||||
January 31, | February 1, | % | January 31, | February 1, | % | |||||||||||||||||||
2015 | 2014 | chg | 2015 | 2014 | chg | |||||||||||||||||||
Net revenue: | ||||||||||||||||||||||||
North American Retail | $ | 317,019 | $ | 329,031 | (4%) | $ | 1,032,601 | $ | 1,075,475 | (4%) | ||||||||||||||
Europe | 240,866 | 287,084 | (16%) | 825,136 | 903,791 | (9%) | ||||||||||||||||||
Asia | 75,434 | 83,003 | (9%) | 281,090 | 292,714 | (4%) | ||||||||||||||||||
North American Wholesale | 36,646 | 40,823 | (10%) | 167,707 | 179,600 | (7%) | ||||||||||||||||||
Licensing | 26,762 | 28,422 | (6%) | 111,139 | 118,206 | (6%) | ||||||||||||||||||
$ | 696,727 | $ | 768,363 | (9%) | $ | 2,417,673 | $ | 2,569,786 | (6%) | |||||||||||||||
Earnings (loss) from operations: | ||||||||||||||||||||||||
North American Retail | $ | 9,844 | $ | 27,177 | (64%) | $ | (13,734 | ) | $ | 39,540 | (135%) | |||||||||||||
Europe | 40,690 | 49,636 | (18%) | 66,231 | 97,231 | (32%) | ||||||||||||||||||
Asia | 270 | 7,695 | (96%) | 8,013 | 25,592 | (69%) | ||||||||||||||||||
North American Wholesale | 7,313 | 9,542 | (23%) | 34,173 | 38,771 | (12%) | ||||||||||||||||||
Licensing | 25,501 | 27,329 | (7%) | 101,288 | 107,805 | (6%) | ||||||||||||||||||
Corporate Overhead | (10,452 | ) | (16,769 | ) | (38%) | (70,059 | ) | (73,910 | ) | (5%) | ||||||||||||||
Restructuring Charges | — | (2,087 | ) | — | (12,442 | ) | ||||||||||||||||||
$ | 73,166 | $ | 102,523 | (29%) | $ | 125,912 | $ | 222,587 | (43%) | |||||||||||||||
Operating margins: | ||||||||||||||||||||||||
North American Retail | 3.1 | % | 8.3 | % | (1.3 | %) | 3.7 | % | ||||||||||||||||
Europe | 16.9 | % | 17.3 | % | 8.0 | % | 10.8 | % | ||||||||||||||||
Asia | 0.4 | % | 9.3 | % | 2.9 | % | 8.7 | % | ||||||||||||||||
North American Wholesale | 20.0 | % | 23.4 | % | 20.4 | % | 21.6 | % | ||||||||||||||||
Licensing | 95.3 | % | 96.2 | % | 91.1 | % | 91.2 | % | ||||||||||||||||
Total Company before restructuring charges | 10.5 | % | 13.6 | % | 5.2 | % | 9.1 | % | ||||||||||||||||
Total Company including restructuring charges | 10.5 | % | 13.3 | % | 5.2 | % | 8.7 | % |
Guess?, Inc. and Subsidiaries | ||||||||||||||||||||||||
Constant Currency Financial Measures | ||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||
Jan 31, 2015 | Feb 1, 2014 | % change | ||||||||||||||||||||||
As Reported | Foreign Currency Impact | Constant Currency | As Reported | As Reported | Constant Currency | |||||||||||||||||||
Net revenue: | ||||||||||||||||||||||||
North American Retail | $ | 317,019 | $ | 5,699 | $ | 322,718 | $ | 329,031 | (4%) | (2%) | ||||||||||||||
Europe | 240,866 | 31,063 | 271,929 | 287,084 | (16%) | (5%) | ||||||||||||||||||
Asia | 75,434 | 1,746 | 77,180 | 83,003 | (9%) | (7%) | ||||||||||||||||||
North American Wholesale | 36,646 | 1,245 | 37,891 | 40,823 | (10%) | (7%) | ||||||||||||||||||
Licensing | 26,762 | — | 26,762 | 28,422 | (6%) | (6%) | ||||||||||||||||||
$ | 696,727 | $ | 39,753 | $ | 736,480 | $ | 768,363 | (9%) | (4%) | |||||||||||||||
Twelve Months Ended | ||||||||||||||||||||||||
Jan 31, 2015 | Feb 1, 2014 | % change | ||||||||||||||||||||||
As Reported | Foreign Currency Impact | Constant Currency | As Reported | As Reported | Constant Currency | |||||||||||||||||||
Net revenue: | ||||||||||||||||||||||||
North American Retail | $ | 1,032,601 | $ | 15,198 | $ | 1,047,799 | $ | 1,075,475 | (4%) | (3%) | ||||||||||||||
Europe | 825,136 | 21,337 | 846,473 | 903,791 | (9%) | (6%) | ||||||||||||||||||
Asia | 281,090 | (6,694 | ) | 274,396 | 292,714 | (4%) | (6%) | |||||||||||||||||
North American Wholesale | 167,707 | 3,877 | 171,584 | 179,600 | (7%) | (4%) | ||||||||||||||||||
Licensing | 111,139 | — | 111,139 | 118,206 | (6%) | (6%) | ||||||||||||||||||
$ | 2,417,673 | $ | 33,718 | $ | 2,451,391 | $ | 2,569,786 | (6%) | (5%) |
Guess?, Inc. and Subsidiaries | ||||||||||||||
Selected Condensed Consolidated Balance Sheet Data | ||||||||||||||
(in thousands) | ||||||||||||||
January 31, | February 1, | |||||||||||||
2015 | 2014 | |||||||||||||
ASSETS | ||||||||||||||
Cash and cash equivalents | $ | 483,483 | $ | 502,945 | ||||||||||
Short-term investments | — | 5,123 | ||||||||||||
Receivables, net | 216,205 | 276,565 | ||||||||||||
Inventories | 319,078 | 350,899 | ||||||||||||
Other current assets | 92,593 | 80,554 | ||||||||||||
Property and equipment, net | 259,524 | 324,606 | ||||||||||||
Other assets | 230,522 | 223,739 | ||||||||||||
Total Assets | $ | 1,601,405 | $ | 1,764,431 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
Current portion of capital lease obligations and borrowings | $ | 1,548 | $ | 4,160 | ||||||||||
Other current liabilities | 300,418 | 365,865 | ||||||||||||
Capital lease obligations and other long-term debt | 6,165 | 7,580 | ||||||||||||
Other long-term liabilities | 199,391 | 211,010 | ||||||||||||
Redeemable and nonredeemable noncontrolling interests | 20,027 | 21,302 | ||||||||||||
Guess?, Inc. stockholders’ equity | 1,073,856 | 1,154,514 | ||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 1,601,405 | $ | 1,764,431 |
Guess?, Inc. and Subsidiaries | ||||||||||||||
Condensed Consolidated Cash Flow Data | ||||||||||||||
(in thousands) | ||||||||||||||
Twelve Months Ended | ||||||||||||||
January 31, | February 1, | |||||||||||||
2015 | 2014 | |||||||||||||
Net cash provided by operating activities | $ | 153,826 | $ | 327,942 | ||||||||||
Net cash used in investing activities | (57,831 | ) | (63,076 | ) | ||||||||||
Net cash used in financing activities | (79,687 | ) | (84,807 | ) | ||||||||||
Effect of exchange rates on cash and cash equivalents | (35,770 | ) | (6,135 | ) | ||||||||||
Net change in cash and cash equivalents | (19,462 | ) | 173,924 | |||||||||||
Cash and cash equivalents at the beginning of the year | 502,945 | 329,021 | ||||||||||||
Cash and cash equivalents at the end of the year | $ | 483,483 | $ | 502,945 | ||||||||||
Supplemental information: | ||||||||||||||
Depreciation and amortization | $ | 85,060 | $ | 88,369 | ||||||||||
Rent | $ | 284,045 | $ | 283,543 |
Guess?, Inc. and Subsidiaries | ||||||||||||||
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow | ||||||||||||||
(in thousands) | ||||||||||||||
Twelve Months Ended | ||||||||||||||
January 31, | February 1, | |||||||||||||
2015 | 2014 | |||||||||||||
Net cash provided by operating activities | $ | 153,826 | $ | 327,942 | ||||||||||
Less: Purchases of property and equipment | (71,498 | ) | (75,438 | ) | ||||||||||
Free cash flow | $ | 82,328 | $ | 252,504 | ||||||||||
Guess?, Inc. and Subsidiaries | ||||||||||
Retail Store Data | ||||||||||
International Store Count | ||||||||||
As of January 31, 2015 | As of February 1, 2014 | |||||||||
Total | Directly Operated | Total | Directly Operated | |||||||
Region | Stores | Stores | Stores | Stores | ||||||
United States and Canada | 481 | 481 | 494 | 494 | ||||||
Europe and the Middle East | 596 | 265 | 627 | 263 | ||||||
Asia | 496 | 49 | 499 | 47 | ||||||
Central and South America | 95 | 42 | 88 | 36 | ||||||
1,668 | 837 | 1,708 | 840 | |||||||
Guess?, Inc. and Subsidiaries | ||||||||||
Retail Store Data | ||||||||||
U.S. and Canada | ||||||||||
Twelve Months Ended | ||||||||||
January 31, | February 1, | |||||||||
2015 | 2014 | |||||||||
Number of stores at the beginning of the year | 494 | 512 | ||||||||
Store openings | 15 | 13 | ||||||||
Store closures | (28) | (31) | ||||||||
Number of stores at the end of the year | 481 | 494 | ||||||||
Total store square footage at the end of the year | 2,301,000 | 2,329,000 |
Guess?, Inc. and Subsidiaries | |||||||||||||||||||||
North American Retail Net Revenue | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
January 31, | February 1, | % | January 31, | February 1, | % | ||||||||||||||||
2015 | 2014 | chg | 2015 | 2014 | chg | ||||||||||||||||
Net revenue: | |||||||||||||||||||||
Retail stores | $ | 286,809 | $ | 306,950 | (6.6 | %) | $ | 954,198 | $ | 1,020,104 | (6.5 | %) | |||||||||
E-commerce sites | 30,210 | 22,081 | 36.8 | % | 78,403 | 55,371 | 41.6 | % | |||||||||||||
Total | $ | 317,019 | $ | 329,031 | (3.7 | %) | $ | 1,032,601 | $ | 1,075,475 | (4.0 | %) | |||||||||
Guess?, Inc. and Subsidiaries | |||||||
Retail Store Change in Comparable Store Sales | |||||||
U.S. and Canada | |||||||
Three Months Ended | Twelve Months Ended | ||||||
January 31, 2015 | January 31, 2015 | ||||||
U.S. Dollars | Constant Currency | U.S. Dollars | Constant Currency | ||||
Excluding e-commerce sales | (8.1%) | (6.5%) | (7.6%) | (6.2%) | |||
Impact of e-commerce sales | 3.1% | 3.0% | 2.7% | 2.6% | |||
Including e-commerce sales | (5.0%) | (3.5%) | (4.9%) | (3.6%) |