LOS ANGELES, July 28 /PRNewswire-FirstCall/ -- Guess?, Inc. (NYSE: GES) today reported financial results for the second quarter ended July 2, 2005.
Second Quarter Results
For the second quarter ended July 2, 2005, the Company reported that net earnings increased by 95.4% to $4.2 million compared to net earnings of $2.1 million for the quarter ended June 26, 2004. Diluted earnings per share increased 80.0% to $0.09 per share in the current quarter versus $0.05 per share in the second quarter last year.
Maurice Marciano, Co-Chairman and Co-CEO, commented, "We are pleased with our second quarter financial performance. Our wholesale, retail and licensing operations all posted solid performance during the period. We controlled expenses effectively and operated with leaner inventories in North America, which contributed to higher margins in our wholesale segment and a better transition into the important back to school selling period in our stores. Our retail business and the licensing segment had solid results based on strong customer response to our product and our new contemporary line, Marciano, is performing ahead of plan. We are very pleased with the progress made with our European business and its integration. We believe we are well positioned for strong international expansion and remain confident about our prospects for the balance of 2005."
Total net revenue for the second quarter of 2005 increased 15.7% to $178.2 million from $154.1 million in the second quarter of 2004. The Company's retail stores in the U.S. and Canada generated revenue of $132.9 million in the 2005 second quarter, a 15.3% increase from $115.2 million, as reported in the prior year period. Comparable store sales increased 4.2% during the second quarter of 2005 versus the prior year period. Net revenue from the Company's wholesale segment increased 3.5% to $26.1 million in the second quarter of 2005 from $25.3 million in the same year-ago period. Net revenue from the Company's European operations increased 146.3% to $9.9 million in the second quarter of 2005, compared to $4.0 million in the prior year period. Licensing segment net revenue decreased 3.0% to $9.3 million in the second quarter of 2005 from $9.6 million in the prior year period. The Company operated 301 retail stores at second quarter-end 2005 versus 264 stores a year earlier.
Six Month Results
For the six months ended July 2, 2005, the Company reported that net earnings increased 327.0% to $12.3 million compared to net earnings of $2.9 million for the six months ended June 26, 2004. Diluted earnings per share increased 366.7% to $0.28 per share in the current six-month period versus $0.06 per share in the comparable period last year. The six months ended July 2, 2005 had 183 days compared to 178 days in the six months ended June 26, 2004.
Total net revenue increased 28.1% to $393.8 million in the 2005 six-month period from $307.4 million in the prior year period. The Company's retail stores in the U.S. and Canada generated revenue of $249.4 million for the first six months of 2005, an increase of 16.1% from $214.8 million for the prior year period. Comparable store sales increased 4.4% during the first half of 2005. Net revenue from the Company's wholesale segment in the first half of 2005 increased 7.2% to $57.1 million from $53.3 million in the first six months of 2004. Net revenue from the Company's European operations increased 253.7% to $66.6 million in the first six months of 2005, compared to $18.8 million in the prior year period, following the acquisition of the Company's European jeanswear licensee on January 3, 2005. Licensing segment net revenue was $20.7 million in the first six months of 2005, a 0.9% increase from $20.5 million for the same prior year period.
July Comparable Store Sales
The Company's July fiscal month began on July 3, 2005 and will end on July 30, 2005. Based on current sales trends, the Company expects July comparable store sales to increase in the low to mid single digits on a percentage basis.
The Company will hold a conference call at 4:30 pm (ET) on July 28, 2005 to discuss the news announced in this press release. A live webcast of the conference call will be accessible at www.guess.com via the "Investor's Info" link from the "Guess?, Inc." section of the site. The webcast will be archived on the website for 30 days.
Guess?, Inc. designs, markets, distributes and licenses a lifestyle collection of contemporary apparel, accessories and related consumer products. At July 2, 2005, the Company operated 301 retail stores in the United States and Canada. The Company also distributes its products through better department and specialty stores around the world. For more information about the Company, please visit www.guess.com.
Except for historical information contained herein, certain matters discussed in this press release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are only expectations, and involve known and unknown risks and uncertainties, which may cause actual results in future periods and other future events to differ materially from what is currently anticipated. Factors which may cause actual results in future periods to differ from current expectations include, among other things, the continued availability of sufficient working capital, the successful integration of acquisitions and new stores into existing operations, the continued desirability and customer acceptance of existing and future product lines (including licensed product lines), possible cancellations of wholesale orders, the success of competitive products, and the availability of adequate sources of capital. In addition to these factors, the economic and other factors identified in the Company's most recent annual report on Form 10-K for the fiscal year ended December 31, 2004, including but not limited to the risk factors discussed therein, could affect the forward-looking statements contained herein and in the Company's other public documents.
Contact: Carlos Alberini
President & Chief Operating Officer
(213) 765-3582
Frederick G. Silny
SVP & Chief Financial Officer
(213) 765-3289
Guess?, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(dollars in thousands, except per share data)
(Unaudited)
Three Months Ended
July 2, June 26,
2005 2004
$ % $ %
Net revenue
Product sales $168,913 94.8% $144,489 93.8%
Net royalties 9,322 5.2% 9,608 6.2%
178,235 100.0% 154,097 100.0%
Cost of product sales 111,757 62.7% 96,307 62.5%
Gross profit 66,478 37.3% 57,790 37.5%
Selling, general and administrative
expenses 58,717 32.9% 52,577 34.1%
Earnings from operations 7,761 4.4% 5,213 3.4%
Other (income) expense:
Interest expense 2,093 1.2% 1,576 1.0%
Interest income (1,043) (0.6%) (103) --
Earnings before income taxes 6,711 3.8% 3,740 2.4%
Income taxes 2,547 1.5% 1,609 1.0%
Net earnings $4,164 2.3% $2,131 1.4%
Net earnings per share:
Basic $0.09 $0.05
Diluted $0.09 $0.05
Weighted number of shares outstanding:
Basic 44,238 43,997
Diluted 44,703 44,553
Six Months Ended
July 2, June 26,
2005 2004
$ % $ %
Net revenue
Product sales $373,107 94.7% $286,894 93.3%
Net royalties 20,736 5.3% 20,548 6.7%
393,843 100.0% 307,442 100.0%
Cost of product sales 245,142 62.2% 197,122 64.1%
Gross profit 148,701 37.8% 110,320 35.9%
Selling, general and administrative
expenses 125,786 32.0% 102,498 33.3%
Earnings from operations 22,915 5.8% 7,822 2.6%
Other (income) expense:
Interest expense 3,847 1.0% 2,961 1.0%
Interest income (1,478) (0.4%) (205) --
Earnings before income taxes 20,546 5.2% 5,066 1.6%
Income taxes 8,219 2.1% 2,179 0.7%
Net earnings $12,327 3.1% $2,887 0.9%
Net earnings per share:
Basic $0.28 $0.07
Diluted $0.28 $0.06
Weighted number of shares outstanding:
Basic 44,219 43,881
Diluted 44,677 44,456
Guess?, Inc. and Subsidiaries
Consolidated Segment Data
(in thousands)
(Unaudited)
Three Months Ended Six Months Ended
July 2, June 26, July 2, June 26,
2005 2004 2005 2004
Net revenue:
Retail operations $132,908 $115,248 $249,403 $214,772
Wholesale operations 26,087 25,214 57,146 53,303
European operations 9,918 4,027 66,558 18,819
Licensing operations 9,322 9,608 20,736 20,548
$178,235 $154,097 $393,843 $307,442
Earnings (loss) from operations:
Retail operations $13,457 $12,546 $10,049 $10,868
Wholesale operations 279 (4,752) 2,406 (5,946)
European operations (4,853) (508) 11,000 4,783
Licensing operations 7,906 7,065 17,050 16,048
Corporate overhead (9,028) (9,138) (17,590) (17,931)
$7,761 $5,213 $22,915 $7,822
Guess?, Inc. and Subsidiaries
Selected Condensed Consolidated Balance Sheet Data
(in thousands)
(Unaudited)
July 2, December 31, June 26,
2005 2004 2004
ASSETS
Cash and cash equivalents $88,273 $106,003 $50,377
Restricted cash 3,231 3,660 4,097
Receivables, net 74,399 53,915 38,084
Inventories, net 113,206 82,329 96,810
Other current assets 26,307 25,116 26,684
Property and equipment, net 121,430 113,944 106,524
Other assets 58,479 39,337 35,588
Total Assets $485,325 $424,304 $358,164
LIABILITIES AND STOCKHOLDERS' EQUITY
Current installments of notes
payable and long-term debt $37,015 $13,430 $12,948
Other current liabilities 122,659 119,369 92,510
Notes payable and long-term debt,
excluding current installments 50,848 41,396 47,773
Other liabilities 43,938 29,532 16,353
Stockholders' equity 230,865 220,577 188,580
Total Liabilities and
Stockholders' Equity $485,325 $424,304 $358,164
Guess?, Inc. and Subsidiaries
Condensed Consolidated Cash Flow Data
(in thousands)
(Unaudited)
Six Months Ended
July 2, June 26,
2005 2004
Net cash provided by (used in)
operating activities $23,937 $(1,468)
Net cash used in investing activities (41,389) (9,950)
Net cash provided by (used in)
financing activities 148 (5,282)
Effect of exchange rates on cash (426) (86)
Net decrease in cash and cash
equivalents (17,730) (16,786)
Cash and cash equivalents at the
beginning of the year 106,003 67,163
Cash and cash equivalents at the end
of the period $88,273 $50,377
Supplemental information:
Depreciation and amortization $16,985 $17,498
Rent 34,433 30,462
Guess?, Inc. and Subsidiaries
Retail Store Data
U.S. and Canada
(Unaudited)
Six Months Ended
July 2, June 26,
2005 2004
Number of stores at the beginning of
the year 287 265
Store openings 21 7
Store closures (7) (8)
Number of stores at the end of the
period 301 264
Total store square footage at the end
of the period 1,508,000 1,370,000
SOURCE Guess?, Inc.
-0- 07/28/2005
/CONTACT: Carlos Alberini, President & Chief Operating Officer,
+1-213-765-3582, or Frederick G. Silny, SVP & Chief Financial Officer,
+1-213-765-3289, both of Guess?, Inc./
/Web site: http://www.guess.com /
(GES)
CO: Guess?, Inc.
ST: California
IN: FAS REA TEX
SU: ERN CCA
KA-AP
-- LATH050 --
0644 07/28/2005 16:00 EDT http://www.prnewswire.com