Provides Q2 EPS Guidance in the Range of
- Global revenues reached
$441 million , flat in constant dollars and down 10% in US dollars compared to last year. - Operating income reached
$48 million , down 37% compared to last year. - Cash position increased
$52 million from last year. Balance sheet remains strong.
First Quarter Fiscal 2010 Results
For the first quarter of fiscal 2010, the Company reported net earnings of
Mr. Marciano continued, "We expect the challenging economic conditions to
persist for some time. However, we believe that the strength of our product
lines and our diversified business model position us well in this environment.
We remain committed to our international expansion strategy, and continue to
see opportunities in
Total net revenue for the first quarter of fiscal 2010 decreased 9.8% to
Net revenue from the Company's wholesale segment, which includes the
Company's Asian operations, decreased 12.3% to
Net revenue from the Company's European segment decreased 18.5% to
Licensing segment net revenue decreased 6.0% to
Operating earnings for the first quarter of fiscal 2010 decreased 36.7% to
The Company's effective tax rate declined to 33.0% for the first quarter of fiscal 2010, from 36.0% for the first quarter of the prior year.
Share Repurchase
During the first quarter of fiscal 2010, the Company repurchased
approximately 400,000 shares of its common stock at an average purchase price
of
Outlook
The Company's expectations for the second quarter of fiscal 2010 ending
-
Consolidated net revenues are expected to range from
$465 million to$485 million . - Operating margin is expected to be around 14%.
- Diluted earnings per share are expected to be in the range of
$0.42 to$0.45 .
The continued volatility in the global economy presents a substantial challenge to forecasting future consumer behavior and future financial results. Due to its limited visibility, the Company is not providing specific revenue, operating margin or diluted earnings per share guidance for the full fiscal year 2010.
Dividend
The Company also announced today that its Board of Directors has approved
a quarterly cash dividend of
The Company will hold a conference call at
Except for historical information contained herein, certain matters
discussed in this press release, including statements concerning the Company's
future prospects and guidance for the second quarter of fiscal 2010 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 to differ materially from what is currently anticipated. Factors
which may cause actual results in future periods to differ materially from
current expectations include, among other things, domestic and international
economic conditions, including economic and other events leading to a
reduction in consumer confidence and discretionary consumer spending; our
ability to, among other things, anticipate consumer preferences, effectively
operate our various retail concepts, effectively manage inventories and
successfully execute our strategies, including our supply chain and
international growth strategies; and risks associated with changes in
economic, political, social and other conditions affecting our foreign
operations, including currency fluctuations. In addition to these factors,
the economic, litigation-related and other risks identified in the Company's
most recent annual report on Form 10-K and other filings with the
Guess?, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(dollars in thousands, except per share data)
Three Months Ended
----------------------------------
May 2, May 3,
2009 2008
$ % $ %
----------------------------------
Net revenue
Product sales $419,127 95.0% $465,735 95.2%
Net royalties 22,074 5.0% 23,485 4.8%
------ --- ------ ---
441,201 100.0% 489,220 100.0%
Cost of product
sales 263,698 59.8% 267,981 54.8%
------- ---- ------- ----
Gross profit 177,503 40.2% 221,239 45.2%
Selling,
general and
administrative
expenses 129,469 29.3% 145,314 29.7%
------- ---- ------- ----
Earnings from
operations 48,034 10.9% 75,925 15.5%
Other (income)
expense:
Interest
expense 606 0.1% 1,025 0.2%
Interest
income (737) (0.2%) (1,533) (0.3%)
Other, net (1,266) (0.2%) 908 0.2%
------ ---- --- ---
Earnings before
income taxes 49,431 11.2% 75,525 15.4%
Income taxes 16,312 3.7% 27,189 5.5%
------ --- ------ ---
Net earnings 33,119 7.5% 48,336 9.9%
Net earnings
attributable to
noncontrolling
interests in
subsidiaries 577 0.1% 535 0.1%
--- --- --- ---
Net earnings
attributable to
Guess?, Inc. $32,542 7.4% $47,801 9.8%
======= === ======= ===
Earnings per
common share
attributable to
common
stockholders:
Basic (1) $0.35 $0.51
Diluted (1) $0.35 $0.50
Weighted average
common shares
outstanding
attributable to
common
stockholders:
Basic 90,631 92,950
Diluted (1) 91,158 93,806
(1) The company adopted a new accounting pronouncement in the first
quarter of fiscal 2010 that requires the company to exclude certain
earnings and shares related to participating securities from the
computation of earnings per common share. The net earnings attributable to
participating securities were approximately $532 and $766 in the first
quarter of fiscal 2010 and fiscal 2009, respectively, and the amount of
participating shares for the same periods were 237 and 233, respectively.
The effect of the new accounting pronouncement on diluted earnings per
common share is to reduce both the current quarter and the prior year
quarter by approximately $0.01 per share. The prior year's earnings per
share has been adjusted to reflect the change.
Guess?, Inc. and Subsidiaries
Consolidated Segment Data
(dollars in thousands)
Three Months Ended
------------------------
May 2, May 3, %
2009 2008 chg
-------- -------- ----
Net revenue:
Retail operations $207,560 $211,937 -2%
Wholesale operations 65,869 75,134 -12%
European operations 145,698 178,664 -18%
Licensing operations 22,074 23,485 -6%
------ ------
$441,201 $489,220 -10%
======== ========
Earnings (loss) from operations:
Retail operations $18,007 $22,844 -21%
Wholesale operations 7,422 12,554 -41%
European operations 23,139 39,961 -42%
Licensing operations 19,015 20,247 -6%
Corporate overhead (19,549) (19,681) -1%
------- -------
$48,034 $75,925 -37%
======= =======
Operating margins:
Retail operations 8.7% 10.8%
Wholesale operations 11.3% 16.7%
European operations 15.9% 22.4%
Licensing operations 86.1% 86.2%
Total Company 10.9% 15.5%
Guess?, Inc. and Subsidiaries
Selected Condensed Consolidated Balance Sheet Data
(in thousands)
May 2, January 31, May 3,
2009 2009 2008
---------- ---------- ----------
ASSETS
Cash and cash
equivalents $312,630 $294,118 $260,390
Receivables, net 277,436 262,349 315,598
Inventories 203,395 239,675 202,804
Other current assets 92,696 98,047 52,247
Property and
equipment, net 235,607 221,416 237,193
Other assets 137,502 130,961 151,361
---------- ---------- ----------
Total Assets $1,259,266 $1,246,566 $1,219,593
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of
borrowings and
capital lease
obligations $30,645 $24,018 $47,562
Other current
liabilities 276,531 311,866 309,083
Borrowings and
capital lease
obligations 14,327 14,586 18,453
Other long-term
liabilities 114,979 110,592 124,946
Guess?, Inc.
stockholders'
equity 808,720 777,032 711,074
Noncontrolling
interests in
subsidiaries 14,064 8,472 8,475
---------- ---------- ----------
Total
Liabilities and
Stockholders'
Equity $1,259,266 $1,246,566 $1,219,593
========== ========== ==========
Guess?, Inc. and Subsidiaries
Condensed Consolidated Cash Flow Data
(in thousands)
Three Months Ended
------------------
May 2, May 3,
2009 2008
---- ----
Net cash provided by
operating activities $43,067 $2,505
Net cash used in
investing activities (18,265) (26,573)
Net cash (used in)/
provided by financing
activities (7,603) 7,626
Effect of exchange
rates on cash 1,313 1,237
----- -----
Net increase/ (decrease)
in cash and cash equivalents 18,512 (15,205)
Cash and cash equivalents
at the beginning of the year 294,118 275,595
-------- --------
Cash and cash equivalents
at the end of the period $312,630 $260,390
======== ========
Supplemental information:
Depreciation and amortization $14,547 $13,813
Rent 41,691 37,513
Guess?, Inc. and Subsidiaries
Retail Store Data
U.S. and Canada
Three Months Ended
--------------------
May 2, May 3,
2009 2008
--------- ---------
Number of stores
at the beginning
of the year 425 373
Store openings 6 19
Store closures (2) (1)
--- ---
Number of stores
at the end of
the period 429 391
=== ===
Total store
square footage
at the end of
the period 1,969,000 1,817,000
========= =========
SOURCE:
Investor Relations of
+1-213-765-5578
Web Site: http://www.guess.com