View:
Download DOC
Download PDF
Download XLS
8-K


 


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 16, 2016 

GUESS?, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)


1-11893
95-3679695
(Commission File Number)
(IRS Employer Identification No.)

1444 S. Alameda Street, Los Angeles, California 90021
(Address of principal executive offices) (Zip Code)


Registrant’s telephone number, including area code: (213) 765-3100


Not applicable
(Former name or former address, if changed since last report)

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))


 





Item 2.02. Results of Operations and Financial Condition.

Guess?, Inc. (the “Company”) issued a press release on March 16, 2016 announcing its financial results for the quarter and year ended January 30, 2016. A copy of the press release is being furnished as Exhibit 99.1 attached hereto.

The information in this Item 2.02 of Form 8-K is being furnished hereby and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

99.1
Press Release of Guess?, Inc. dated March 16, 2016 (financial results for the quarter and year ended January 30, 2016)





2


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Guess?, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Dated: March 16, 2016
GUESS?, INC.
 
 
 
By:
/s/ Sandeep Reddy
 
 
Sandeep Reddy
Chief Financial Officer



3


EXHIBIT INDEX


Exhibit No.
 
Description
 
 
 
99.1
 
Press Release of Guess?, Inc. dated March 16, 2016 (financial results for the quarter and year ended January 30, 2016)

4
Exhibit

 
 
 
 
Exhibit 99.1
    
                        
GUESS?, INC. REPORTS FOURTH QUARTER RESULTS

Q4 Fiscal 2016 EPS of $0.57, Compared to EPS of $0.63 in Q4 Fiscal 2015

Q4 Fiscal 2016 Revenues Decreased 6% to $658 Million; Increased 1% in Constant Currency

Fiscal Year 2016 EPS of $0.96, Compared to EPS of $1.11 in Fiscal Year 2015

Provides Guidance for Q1 Fiscal 2017 in the Range of $0.20 to $0.17 Net Loss Per Share

Provides Fiscal Year 2017 EPS Guidance in the Range of $0.65 to $0.85

Provides Target in Three Years of $3.0B in Revenues and 7.5% in Operating Margin


LOS ANGELES, March 16, 2016 - Guess?, Inc. (NYSE: GES) today reported unaudited financial results for its fourth quarter and fiscal year ended January 30, 2016.

Fourth Quarter Fiscal 2016 Highlights

•
Americas Retail revenues decreased 3% in U.S. dollars and increased 1% in constant currency; retail comp sales including e-commerce decreased 1% in U.S. dollars and increased 2% in constant currency
•
Europe revenues decreased 5% in U.S. dollars and increased 6% in constant currency
•
Asia revenues decreased 18% in U.S. dollars and 14% in constant currency
•
Americas Wholesale revenues decreased 9% in U.S. dollars and 1% in constant currency
•
Operating earnings decreased 4%
•
Earnings per share decreased 10%, including the negative impact of currency of 30%
•
Announces quarterly cash dividend of $0.225

Fiscal Year 2016 Highlights

•
Global revenues decreased 9% at $2.2 billion in U.S. dollars; decreased 1% in constant currency
•
Operating earnings decreased 4%
•
Earnings per share decreased 14%, including the negative impact of currency of 39%

Fourth Quarter Fiscal 2016 Results

Victor Herrero, Chief Executive Officer, commented, “I am pleased to report that fourth quarter earnings per share were within the range of our guidance. In Europe, our retail business performed extremely well and delivered positive comp store sales in the high-single digits. In the Americas, our retail business in the U.S. and Canada also achieved positive comps in constant currency. There is still more work to be done, but I am convinced that the initiatives we have started to implement in the last few months have contributed to these encouraging results.”

Mr. Herrero continued, “Turning to the outlook for the next three years, based on the Strategic Initiatives that I have mentioned in the last two earnings calls, we are planning for our annual revenues to reach $3.0 billion in three years at prevailing currency rates. This $800 million increase is expected to be driven by growth in E-commerce, retail expansion and positive comp store sales. In terms of regional growth, we expect $300 million of this increase to be driven by the Americas, $300 million by Europe and $200 million by Asia. Again, assuming currencies remain at prevailing levels, we are planning for operating margin to reach 7.5% in three years, mainly driven by leverage, and for earnings per share to increase at a compound annual growth rate of 20%. Overall, more than ever, I truly believe in the potential of the Guess Brand and these three-year plans are a reflection of that.”

For the fourth quarter of fiscal 2016, the Company recorded net earnings of $47.8 million, an 11.4% decrease from $53.9 million for the fourth quarter of fiscal 2015. Diluted earnings per share decreased 9.5% to $0.57 for the fourth quarter of fiscal 2016, from $0.63 for the prior-year quarter. The negative impact of currency on earnings per share in the fourth quarter of fiscal 2016 was approximately $0.19 per share.

Total net revenue for the fourth quarter of fiscal 2016 decreased 5.5% to $658.3 million, from $696.7 million in the prior-year quarter. In constant currency, total net revenue increased 0.6%. Refer to the accompanying tables for a summary of net revenue by segment as well as information regarding the impact of foreign currency exchange rate fluctuations on the Company’s net revenue.

Operating earnings for the fourth quarter of fiscal 2016 decreased 4.4% to $70.0 million (including a $4.5 million unfavorable currency translation impact), from $73.2 million in the prior-year period. Operating margin in the fourth quarter was relatively flat at 10.6%, compared to 10.5% in the prior-year quarter. The favorable impact from lower store impairment charges was mostly offset by the negative impact from currency exchange rate fluctuations on the operating margin. The negative impact of currency on operating margin for the quarter was roughly 180 basis points.

•
Operating margin for the Company’s Americas Retail segment increased 350 basis points to 6.6% in the fourth quarter of fiscal 2016, compared to 3.1% in the prior-year period, due to a lower SG&A rate, partially offset by lower gross margins. The lower SG&A rate was driven by lower store impairment charges. The lower gross margins were due primarily to more markdowns and the unfavorable impact from currency exchange rate fluctuations on product costs.

•
Operating margin for the Company’s Europe segment decreased 180 basis points to 15.1% in the fourth quarter of fiscal 2016, from 16.9% in the prior-year period, due to lower gross margins, partially offset by a lower SG&A rate. The lower gross margins were driven primarily by the unfavorable impact from currency exchange rate fluctuations on product costs. The lower SG&A rate was due primarily to the favorable impact on the fixed cost structure resulting from positive comparable store sales.

•
Operating margin for the Company’s Asia segment increased 310 basis points to 3.5% in the fourth quarter of fiscal 2016, compared to 0.4% in the prior-year period, due to higher gross margins, partially offset by a higher SG&A rate. The higher gross margins were driven by our South Korea business as we completed the phase out of our G by GUESS product line in the region. The higher SG&A rate was mainly due to overall deleveraging of expenses.

•
Operating margin for the Company’s Americas Wholesale segment decreased 100 basis points to 19.0% in the fourth quarter of fiscal 2016, from 20.0% in the prior-year period, due to lower product margins, partially offset by a lower SG&A rate. The lower product margins were driven primarily by higher product costs including the unfavorable impact from currency exchange rate fluctuations. The lower SG&A rate was due primarily to lower performance-based compensation and lower distribution costs.

•
Operating margin for the Company’s Licensing segment decreased 740 basis points to 87.9% in the fourth quarter of fiscal 2016, from 95.3% in the prior-year period.

Other net income, which primarily includes realized gains on the sale of other assets and net realized and unrealized mark-to-market revaluation gains on foreign exchange currency contracts, partially offset by net unrealized losses on non-operating assets and net unrealized mark-to-market revaluation losses on foreign currency balances, was $0.3 million for the fourth quarter of fiscal 2016, compared to $6.9 million in the prior-year quarter.

Fiscal Year 2016 Results

Net earnings for the fiscal year ended January 30, 2016 were $81.9 million, a decrease of 13.4% from $94.6 million for the fiscal year ended January 31, 2015. Diluted earnings per share decreased 13.5% to $0.96 in fiscal year 2016, from $1.11 in the prior year. The negative impact of currency on earnings per share for the fiscal year ended January 30, 2016 was approximately $0.43 per share.

Total net revenue for fiscal year 2016 decreased 8.8% to $2.20 billion, from $2.42 billion in the prior year. In constant currency, total net revenue decreased 0.9%. Refer to the accompanying tables for a summary of net revenue by segment as well as information regarding the impact of foreign currency exchange rate fluctuations on the Company’s net revenue.

Operating earnings for fiscal year 2016 decreased 3.6% to $121.4 million (including a $10.3 million unfavorable currency translation impact), from $125.9 million in the prior year. Operating margin for fiscal 2016 increased 30 basis points to 5.5% compared to 5.2% in the prior year. The increase in operating margin was driven by lower store impairment charges and higher initial mark-ups, partially offset by the unfavorable impact from currency exchange rate fluctuations. The negative impact of currency on operating margin for fiscal 2016 was roughly 140 basis points.

•
Operating margin for the Company’s Americas Retail segment increased 300 basis points to 1.7% in fiscal 2016, compared to negative 1.3% in the prior year, due to a lower SG&A rate and higher gross margins. The lower SG&A rate was driven by lower store impairment charges. The higher gross margins were due primarily to higher initial mark-ups, partially offset by the unfavorable impact from currency exchange rate fluctuations on product costs and the negative impact on the fixed cost structure resulting from negative comparable store sales.

•
Operating margin for the Company’s Europe segment decreased 40 basis points to 7.6% in fiscal 2016, from 8.0% in the prior year, due to lower gross margins, partially offset by a lower SG&A rate. The lower gross margins were driven primarily by the unfavorable impact from currency exchange rate fluctuations on product costs, partially offset by higher initial mark-ups. The lower SG&A rate was due primarily to the favorable impact on the fixed cost structure resulting from positive comparable store sales.

•
Operating margin for the Company’s Asia segment increased 140 basis points to 4.3% in fiscal 2016, compared to 2.9% in the prior year, driven by higher gross margins in our South Korea business as we completed the phase out of our G by GUESS product line in the region.

•
Operating margin for the Company’s Americas Wholesale segment decreased 200 basis points to 18.4% in fiscal 2016, from 20.4% in the prior year, driven by lower product margins due primarily to lower initial mark-ups.

•
Operating margin for the Company’s Licensing segment decreased 240 basis points to 88.7% in fiscal 2016, from 91.1% in the prior year.

Other net income, which primarily includes net realized and unrealized mark-to-market revaluation gains on foreign exchange currency contracts and realized gains on the sale of other assets, partially offset by net unrealized mark-to-market revaluation losses on foreign currency balances, was $6.8 million for fiscal year 2016 compared to $18.0 million for the prior year.

Dividends

The Company’s Board of Directors has approved a quarterly cash dividend of $0.225 per share on the Company’s common stock. The dividend will be payable on April 15, 2016 to shareholders of record at the close of business on March 30, 2016.

Outlook

The following guidance assumes that foreign currency exchange rates remain at prevailing rates:

The Company’s expectations for the first quarter of fiscal 2017 ending April 30, 2016, are as follows:

•
Consolidated net revenues are expected to decline between 1.5% and 0.5% in constant currency. Currency headwinds are expected to negatively impact consolidated revenue growth by approximately 2.0%, for a net decline between 3.5% and 2.5%.
•
Operating margin is expected to be between minus 5.0% and minus 4.0% and includes 130 basis points of currency headwind.
•
Diluted net loss per share is expected to be in the range of $0.20 to $0.17. The estimated impact on earnings per share of the currency headwinds is approximately $0.04.

For the fiscal year ending January 28, 2017, the Company’s expectations are as follows:

•
Consolidated net revenues are expected to increase between 7.0% and 9.0% in constant currency. Currency headwinds are expected to negatively impact consolidated revenue growth by approximately 1.0%, for a net increase between 6.0% and 8.0%.
•
Operating margin is expected to be between 4.0% and 5.0% and includes 50 basis points of currency headwind.
•
Diluted earnings per share are expected to be in the range of $0.65 to $0.85. The estimated impact on earnings per share of the currency headwinds is approximately $0.11.

During the first quarter of fiscal 2017, the Company approved a global cost reduction plan to streamline its operational structure and reduce expenses. The expectations for the first quarter and fiscal year 2017 exclude the impact of any restructuring charges associated with these activities.

On a segment basis, the Company expects the following ranges for percentage changes for comparable store sales (“comps”) and net revenue in constant currency and U.S. dollars compared to the same prior-year period:

Outlook by Segment1
 
 
 
 
 
 
 
 
 
 
 
 
 
First Quarter of Fiscal 2017
 
Fiscal Year 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
Constant Currency2
 
U.S. Dollars
 
Constant Currency2
 
U.S. Dollars
 
 
 
 
 
 
 
 
 
 
Americas Retail:
 
 
 
 
 
 
 
 
 
Comps
 
down LSD to up LSD
 
down LSD to flat
 
up LSD
 
flat to up LSD
 
Net Revenue
 
down LSD to flat
 
down LSD
 
up LSD to MSD
 
up LSD to MSD
 
 
 
 
 
 
 
 
 
 
Europe:
 
 
 
 
 
 
 
 
 
Comps
 
up mid-teens
 
__ 
 
up MSD to HSD
 
__ 
 
Net Revenue
 
flat
 
flat
 
up LDD
 
up LDD
 
 
 
 
 
 
 
 
 
 
Asia:
 
 
 
 
 
 
 
 
 
Net Revenue
 
down LSD to up LSD
 
down MSD to LSD
 
up high-teens to low twenties
 
up mid-teens to high-teens
 
 
 
 
 
 
 
 
 
 
Americas Wholesale:
 
 
 
 
 
 
 
 
 
Net Revenue
 
down LSD
 
down HSD
 
up MSD
 
up LSD
 
 
 
 
 
 
 
 
 
 
Licensing:
 
 
 
 
 
 
 
 
 
Net Revenue
 
__ 
 
down HSD
 
__ 
 
down MSD
 
 
 
 
 
 
 
 
 
 
Notes
 
 
 
 
 
 
 
 
1

As used in the table above, “LSD” is used to refer to the range of Low-Single-Digits, “MSD” is used to refer to the range of Mid-Single-Digits, “HSD” is used to refer to the range of High-Single-Digits, and “LDD” is used to refer to the range of Low-Double-Digits.
2

Eliminates the impact of expected foreign currency translation to give investors a better understanding of the underlying trends within the business.

Presentation of Non-GAAP Information

The financial information presented in this release includes non-GAAP financial measures such as constant currency financial information and free cash flow measures. The non-GAAP measures are provided in addition to, and not as alternatives for, the Company’s reported GAAP results.

This release includes certain constant currency financial information. Foreign currency exchange rate fluctuations affect the amount reported from translating the Company’s foreign revenue, expenses and balance sheet amounts into U.S. dollars. These rate fluctuations can have a significant effect on reported operating results under GAAP. The Company provides constant currency information to enhance the visibility of underlying business trends, excluding the effects of changes in foreign currency translation rates. To calculate net revenue, comparable store sales and earnings (loss) from operations on a constant currency basis, actual or forecasted results for the current-year period are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year. The constant currency calculations do not adjust for the impact of revaluing specific transactions denominated in a currency that is different to the functional currency of that entity when exchange rates fluctuate. However, in calculating the estimated impact of currency on our earnings per share for our actual and forecasted results, the Company estimates gross margin (including the impact of merchandise-related hedges) and expenses using the appropriate prior-year rates, translates the estimated foreign earnings at the comparable prior-year rates, and excludes the year-over-year earnings impact of gains or losses arising from balance sheet remeasurement and foreign currency contracts not designated as merchandise hedges. The constant currency information presented may not be comparable to similarly titled measures reported by other companies.

The Company also includes information regarding its free cash flows in this release. The Company calculates free cash flows as cash flows from operating activities less purchases of property and equipment. The Company also presents adjusted free cash flows excluding the impact of any significant purchases not in the ordinary course of business in order to enhance the visibility of underlying business trends. Free cash flow measures are not intended to be alternatives to cash flows from operating activities as a measure of liquidity, but rather to provide additional visibility to investors regarding how much cash is generated for discretionary and non-discretionary items after deducting purchases of property and equipment. Free cash flow information presented may not be comparable to similarly titled measures reported by other companies. A reconciliation of reported GAAP cash flows from operating activities to comparable non-GAAP free cash flow measures is provided in the accompanying tables.

Investor Conference Call

The Company will hold a conference call at 4:45 pm (ET) on March 16, 2016 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 Relations” link. The webcast will be archived on the website for 30 days.

About Guess?

Guess?, Inc. designs, markets, distributes and licenses a lifestyle collection of contemporary apparel, denim, handbags, watches, footwear and other related consumer products. Guess? products are distributed through branded Guess? stores as well as better department and specialty stores around the world. As of January 30, 2016, the Company directly operated 835 retail stores in the Americas, Europe and Asia. The Company’s licensees and distributors operated 804 additional retail stores worldwide. As of January 30, 2016, the Company and its licensees and distributors operated in more than 95 countries worldwide. For more information about the Company, please visit www.guess.com.

Forward-Looking Statements

Except for historical information contained herein, certain matters discussed in this press release or the related conference call and webcast, including statements concerning the Company’s expectations, future prospects and strategic initiatives (including those identified by our Chief Executive Officer, Victor Herrero), guidance for the first quarter and full year of fiscal 2017, as well as our three-year plans (including revenues, operating margin and earnings per share growth), 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, which are frequently indicated by terms such as “expect,” “will,” “goal,” “strategy,” “believe,” “continue,” “outlook,” “plan” and similar terms, 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 others: our ability to maintain our brand image and reputation; domestic and international economic conditions, including economic and other events that could negatively impact consumer confidence and discretionary consumer spending; changes in the competitive marketplace and in our commercial relationships; our ability to anticipate and respond to consumer preferences and trends; our ability to manage our inventory commensurate with customer demand; risks related to the timing and costs of delivering merchandise to our stores and our wholesale customers; our ability to effectively operate our various retail concepts, including securing, renewing, modifying or terminating leases for store locations; our ability to successfully implement our growth strategies and other strategic initiatives, including expansion in emerging markets and joint ventures; our ability to successfully or timely implement plans for cost and workforce reductions; changes to our short or long-term strategic initiatives; unexpected obligations arising from new or existing litigation, tax and other regulatory proceedings; adjustments to our unaudited financial statements identified during the completion of our annual independent audit of financial statements and financial controls or from subsequent events arising after issuance of this release; risks associated with our foreign operations, such as violations of laws prohibiting improper payments and the burdens of complying with a variety of foreign laws and regulations; risks associated with the acts or omissions of our third party vendors, including a failure to comply with our vendor code of conduct or other policies; risks associated with cyber attacks and other cyber security risks; and changes in economic, political, social and other conditions affecting our foreign operations and sourcing, including the impact of currency fluctuations, global tax rates and economic and market conditions in Eastern Europe, Southern Europe and Asia (particularly China and Korea). In addition to these factors, the economic, technological, managerial, and other risks identified in the Company’s most recent annual report on Form 10-K and other filings with the Securities and Exchange Commission, including but not limited to the risk factors discussed therein, could cause actual results to differ materially from current expectations. Additional information with respect to known and unknown risks will also be set forth in the Company’s annual report on Form 10-K for the year ended January 30, 2016, which will be filed with the Securities and Exchange Commission in the first quarter of fiscal 2017. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 
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 30, 2016
 
January 31, 2015
 
January 30, 2016
 
January 31, 2015
 
 
 
 
 
$
%
 
$
%
 
$
%
 
$
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Product sales
 
$
633,344

96.2
%
 
$
669,965

96.2
%
 
$
2,100,454

95.3
%
 
$
2,306,534

95.4
%
Net royalties
 
24,915

3.8
%
 
26,762

3.8
%
 
103,857

4.7
%
 
111,139

4.6
%
Net revenue
 
658,259

100.0
%
 
696,727

100.0
%
 
2,204,311

100.0
%
 
2,417,673

100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of product sales
 
418,095

63.5
%
 
435,808

62.6
%
 
1,416,881

64.3
%
 
1,549,788

64.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit
 
240,164

36.5
%
 
260,919

37.4
%
 
787,430

35.7
%
 
867,885

35.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
170,206

25.9
%
 
187,753

26.9
%
 
666,080

30.2
%
 
741,973

30.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings from operations
 
69,958

10.6
%
 
73,166

10.5
%
 
121,350

5.5
%
 
125,912

5.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
(497
)
(0.0
%)
 
(477
)
(0.1
%)
 
(1,953
)
(0.0
%)
 
(2,370
)
(0.1
%)
 
Interest income
 
261

0.0
%
 
362

0.1
%
 
1,045

0.0
%
 
1,438

0.1
%
 
Other, net
 
256

0.0
%
 
6,897

1.0
%
 
6,837

0.3
%
 
18,028

0.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings before income tax expense
 
69,978

10.6
%
 
79,948

11.5
%
 
127,279

5.8
%
 
143,008

5.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense
 
20,690

3.1
%
 
24,359

3.5
%
 
42,464

2.0
%
 
45,824

1.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings
 
49,288

7.5
%
 
55,589

8.0
%
 
84,815

3.8
%
 
97,184

4.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings attributable to noncontrolling interests
 
1,511

0.2
%
 
1,660

0.3
%
 
2,964

0.1
%
 
2,614

0.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings attributable to Guess?, Inc.
 
$
47,777

7.3
%
 
$
53,929

7.7
%
 
$
81,851

3.7
%
 
$
94,570

3.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings per common share attributable to common stockholders:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.57

 
 
$
0.63

 
 
$
0.97

 
 
$
1.11

 
 
Diluted
 
$
0.57

 
 
$
0.63

 
 
$
0.96

 
 
$
1.11

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding attributable to common stockholders:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
83,101

 
 
84,722

 
 
84,264

 
 
84,604

 
 
Diluted
 
83,551

 
 
84,924

 
 
84,525

 
 
84,837

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective tax rate
 
29.6
%
 
 
30.5
%
 
 
33.4
%
 
 
32.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guess?, Inc. and Subsidiaries
Consolidated Segment Data
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
 
 
 
 
 
January 30,
 
January 31,
 
%
 
January 30,
 
January 31,
 
%
 
 
 
 
 
 
2016
 
2015
 
change
 
2016
 
2015
 
change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue:
 
 
 
 
 
 
 
 
 
 
 
 
Americas Retail1
$
308,638

 
$
317,019

 
(3%)
 
$
981,942

 
$
1,032,601

 
(5%)
 
Europe
229,676

 
240,866

 
(5%)
 
727,144

 
825,136

 
(12%)
 
Asia
61,691

 
75,434

 
(18%)
 
241,571

 
281,090

 
(14%)
 
Americas Wholesale1
33,339

 
36,646

 
(9%)
 
149,797

 
167,707

 
(11%)
 
Licensing
24,915

 
26,762

 
(7%)
 
103,857

 
111,139

 
(7%)
 
 
 
 
 
 
$
658,259

 
$
696,727

 
(6%)
 
$
2,204,311

 
$
2,417,673

 
(9%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) from operations:
 
 
 
 
 
 
 
 
 
 
 
 
Americas Retail1
$
20,240

 
$
9,844

 
106%
 
$
16,222

 
$
(13,734
)
 
218%
 
Europe
34,770

 
40,690

 
(15%)
 
55,438

 
66,231

 
(16%)
 
Asia
2,154

 
270

 
698%
 
10,448

 
8,013

 
30%
 
Americas Wholesale1
6,323

 
7,313

 
(14%)
 
27,525

 
34,173

 
(19%)
 
Licensing
21,890

 
25,501

 
(14%)
 
92,172

 
101,288

 
(9%)
 
Corporate Overhead
(15,419
)
 
(10,452
)
 
48%
 
(80,455
)
 
(70,059
)
 
15%
 
 
 
 
 
 
$
69,958

 
$
73,166

 
(4%)
 
$
121,350

 
$
125,912

 
(4%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating margins:
 
 
 
 
 
 
 
 
 
 
 
 
Americas Retail1
6.6
%
 
3.1
%
 
 
 
1.7
%
 
(1.3
%)
 
 
 
Europe
15.1
%
 
16.9
%
 
 
 
7.6
%
 
8.0
%
 
 
 
Asia
3.5
%
 
0.4
%
 
 
 
4.3
%
 
2.9
%
 
 
 
Americas Wholesale1
19.0
%
 
20.0
%
 
 
 
18.4
%
 
20.4
%
 
 
 
Licensing
87.9
%
 
95.3
%
 
 
 
88.7
%
 
91.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Company
10.6
%
 
10.5
%
 
 
 
5.5
%
 
5.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1

In the second quarter of fiscal 2016, the Company changed the names of its “North American Retail” and “North American Wholesale” segments to “Americas Retail” and “Americas Wholesale” to better reflect that these segments are inclusive of its operations in North America as well as Central and South America. There have been no changes to the underlying reporting in either segment.
Guess?, Inc. and Subsidiaries
Constant Currency Financial Measures
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
 
 
 
 
 
 
 
January 30, 2016
 
January 31, 2015
 
% change
 
As Reported
 
Foreign Currency Impact
 
Constant Currency
 
As Reported
 
As Reported
 
Constant Currency
Net revenue:
 
 
 
 
 
 
 
 
 
 
 
 
Americas Retail1
$
308,638

 
$
11,339

 
$
319,977

 
$
317,019

 
(3%)
 
1%
 
Europe
229,676

 
25,171

 
254,847

 
240,866

 
(5%)
 
6%
 
Asia
61,691

 
3,460

 
65,151

 
75,434

 
(18%)
 
(14%)
 
Americas Wholesale1
33,339

 
2,781

 
36,120

 
36,646

 
(9%)
 
(1%)
 
Licensing
24,915

 
—

 
24,915

 
26,762

 
(7%)
 
(7%)
 
 
 
 
 
 
$
658,259

 
$
42,751

 
$
701,010

 
$
696,727

 
(6%)
 
1%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended
 
 
 
 
 
 
 
 
 
 
January 30, 2016
 
January 31, 2015
 
% change
 
As Reported
 
Foreign Currency Impact
 
Constant Currency
 
As Reported
 
As Reported
 
Constant Currency
Net revenue:
 
 
 
 
 
 
 
 
 
 
 
 
Americas Retail1
$
981,942

 
$
34,078

 
$
1,016,020

 
$
1,032,601

 
(5%)
 
(2%)
 
Europe
727,144

 
129,436

 
856,580

 
825,136

 
(12%)
 
4%
 
Asia
241,571

 
14,454

 
256,025

 
281,090

 
(14%)
 
(9%)
 
Americas Wholesale1
149,797

 
12,667

 
162,464

 
167,707

 
(11%)
 
(3%)
 
Licensing
103,857

 
—

 
103,857

 
111,139

 
(7%)
 
(7%)
 
 
 
 
 
 
$
2,204,311

 
$
190,635

 
$
2,394,946

 
$
2,417,673

 
(9%)
 
(1%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1

In the second quarter of fiscal 2016, the Company changed the names of its “North American Retail” and “North American Wholesale” segments to “Americas Retail” and “Americas Wholesale” to better reflect that these segments are inclusive of its operations in North America as well as Central and South America. There have been no changes to the underlying reporting in either segment.

Guess?, Inc. and Subsidiaries
Selected Condensed Consolidated Balance Sheet Data
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
January 30,
 
January 31,
 
 
 
 
 
 
 
 
 
2016
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
445,480

 
$
483,483

 
 
 
 
 
 
 
 
 
 
 
 
Receivables, net
222,359

 
216,205

 
 
 
 
 
 
 
 
 
 
 
 
Inventories
311,704

 
319,078

 
 
 
 
 
 
 
 
 
 
 
 
Other current assets1
56,709

 
73,533

 
 
 
 
 
 
 
 
 
 
 
 
Property and equipment, net
255,344

 
259,524

 
 
 
 
 
 
 
 
 
 
 
 
Other assets1
247,152

 
249,582

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Assets
$
1,538,748

 
$
1,601,405

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
Current portion of capital lease obligations
$
4,024

 
$
1,548

 
 
 
 
 
 
 
 
 
 
 
 
Other current liabilities
323,035

 
300,418

 
 
 
 
 
 
 
 
 
 
 
 
Long term debt and capital lease obligations
2,318

 
6,165

 
 
 
 
 
 
 
 
 
 
 
 
Other long-term liabilities
172,826

 
199,391

 
 
 
 
 
 
 
 
 
 
 
 
Redeemable and nonredeemable noncontrolling interests
18,070

 
20,027

 
 
 
 
 
 
 
 
 
 
 
 
Guess?, Inc. stockholders’ equity
1,018,475

 
1,073,856

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Liabilities and Stockholders’ Equity
$
1,538,748

 
$
1,601,405

 
 
 
 
 
 
 
 
 
 
 
 
Notes
 
 
 
 
 
 
 
 
 
1

As a result of the adoption of new authoritative guidance during fiscal 2016 which requires that all deferred tax liabilities and assets be classified as long-term on the balance sheet, other current assets and other assets at January 31, 2015 were adjusted to reflect the reclassification of deferred tax assets for $19.1 million from current to long-term.

Guess?, Inc. and Subsidiaries
Condensed Consolidated Cash Flow Data
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended
 
 
 
 
 
 
 
 
January 30,
 
January 31,
 
 
 
 
 
 
 
 
2016
 
2015
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
 
 
$
179,429

 
$
153,826

 
 
 
 
 
 
 
 
 
 
 
Net cash used in investing activities
 
 
(73,745
)
 
(57,831
)
 
 
 
 
 
 
 
 
 
 
 
Net cash used in financing activities
 
 
(127,740
)
 
(79,687
)
 
 
 
 
 
 
 
 
 
 
 
Effect of exchange rates on cash and cash equivalents
 
 
(15,947
)
 
(35,770
)
 
 
 
 
 
 
 
 
 
 
 
Net change in cash and cash equivalents
 
 
(38,003
)
 
(19,462
)
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents at the beginning of the year
 
 
483,483

 
502,945

 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents at the end of the year
 
 
$
445,480

 
$
483,483

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental information:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
 
$
70,684

 
$
85,060

 
 
 
 
 
 
 
 
 
 
 
Rent
 
 
$
259,070

 
$
284,045


Guess?, Inc. and Subsidiaries
Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended
 
 
 
 
 
 
 
 
January 30,
 
January 31,
 
 
 
 
 
 
 
 
2016
 
2015
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
 
 
$
179,429

 
$
153,826

 
 
 
 
 
 
 
 
 
 
 
Less: Purchases of property and equipment
 
 
(83,844
)
 
(71,498
)
 
 
 
 
 
 
 
 
 
 
 
Free cash flow
 
 
95,585

 
82,328

 
 
 
 
 
 
 
 
 
 
 
Add: Purchase of U.S. distribution facility
28,773

 
—

 
 
 
 
 
 
 
 
 
 
 
Adjusted free cash flow
 
 
$
124,358

 
$
82,328

 
 
 
 
 
 
 
 
 
 
 

Guess?, Inc. and Subsidiaries
Retail Store Data
International Store Count
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of January 30, 2016
 
As of January 31, 2015
 
 
 
 
Total
 
Directly Operated
 
Total
 
Directly Operated
Region
 
 
 
Stores
 
Stores
 
Stores
 
Stores
 
 
 
 
 
 
 
 
 
 
 
United States and Canada
456
 
455
 
481
 
481
 
 
 
 
 
 
 
 
 
 
 
Europe and the Middle East
594
 
280
 
596
 
265
 
 
 
 
 
 
 
 
 
 
 
Asia
490
 
54
 
496
 
49
 
 
 
 
 
 
 
 
 
 
 
Central and South America
99
 
46
 
95
 
42
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,639
 
835
 
1,668
 
837
 
 
 
 
 
 
 
 
 
 
 
Guess?, Inc. and Subsidiaries
Directly Operated Retail Store Data
U.S. and Canada
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended
 
 
 
 
 
 
 
January 30,
 
January 31,
 
 
 
 
 
 
 
 
2016
 
2015
 
 
 
 
 
 
 
 
 
 
 
Number of stores at the beginning of the year
 
 
481
 
494
 
 
 
 
 
 
 
 
 
 
 
Store openings
 
 
12
 
15
 
 
 
 
 
 
 
 
 
 
 
Store closures
 
 
(38)
 
(28)
 
 
 
 
 
 
 
 
 
 
 
Number of stores at the end of the year
 
 
455
 
481
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total store square footage at the end of the year
 
 
2,211,000
 
2,301,000







Guess?, Inc. and Subsidiaries
Americas Retail Net Revenue
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
January 30,
 
January 31,
 
%
 
January 30,
 
January 31,
 
%
 
2016
 
2015
 
change
 
2016
 
2015
 
change
Net revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail stores
$
275,687

 
$
286,809

 
(3.9
%)
 
$
892,414

 
$
954,198

 
(6.5
%)
 
 
 
 
 
 
 
 
 
 
 
 
E-commerce sites
32,951

 
30,210

 
9.1
%
 
89,528

 
78,403

 
14.2
%
 
 
 
 
 
 
 
 
 
 
 
 
Total
$
308,638

 
$
317,019

 
(2.6
%)
 
$
981,942

 
$
1,032,601

 
(4.9
%)
 
 
 
 
 
 
 
 
 
 
 
 

Guess?, Inc. and Subsidiaries
Retail Store Change in Comparable Store Sales
U.S. and Canada
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
January 30, 2016
 
January 30, 2016
 
U.S. Dollars
 
Constant Currency
 
U.S. Dollars
 
Constant Currency
 
 
 
 
 
 
 
 
Excluding e-commerce sales
(2.2%)
 
1.2%
 
(5.2%)
 
(2.2%)
 
 
 
 
 
 
 
 
Impact of e-commerce sales
1.0%
 
1.0%
 
1.6%
 
1.6%
 
 
 
 
 
 
 
 
Including e-commerce sales
(1.2%)
 
2.2%
 
(3.6%)
 
(0.6%)