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): June 4, 2009
GUESS?,
INC.
(Exact
name of registrant as specified in its charter)
Delaware
(State or
other jurisdiction of incorporation)
|
1-11893
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95-3679695
|
|
(Commission
File Number)
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(IRS
Employer Identification No.)
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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:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
2.02. Results of Operations and Financial Condition.
Guess?,
Inc. (the “Company”) issued a press release on June 4, 2009 announcing its
financial results for the quarter ended May 2, 2009. 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.
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(d)
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Exhibits.
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99.1
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Press
Release of Guess?, Inc. dated June 4, 2009 (financial results for the
quarter ended May 2, 2009)
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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: June 4, 2009 | GUESS?, INC. | ||
|
|
By:
|
/s/ Carlos Alberini | |
| Carlos Alberini | |||
| President and Chief Operating Officer | |||
3
EXHIBIT
INDEX
| Exhibit No. | Description |
|
99.1
|
Press
Release of Guess?, Inc. dated June 4, 2009 (financial results for the
quarter ended May 2, 2009)
|
4
Exhibit 99.1
 GUESS?,
INC. |
NEWS RELEASE
|
For
Immediate Release
GUESS?, INC. REPORTS FIRST
QUARTER FISCAL YEAR 2010 RESULTS
Q1 EPS Reached $0.35
Compared to $0.50 Last Year
Provides Q2 EPS Guidance in
the Range of $0.42 to $0.45
First Quarter Fiscal 2010
Highlights
|
|
-
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Global revenues reached $441
million, flat in constant dollars and down 10% in US dollars compared to
last year.
|
|
|
-
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Operating income reached $48
million, down 37% compared to last
year.
|
|
|
-
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Cash position increased $52
million from last year. Balance sheet remains
strong.
|
LOS ANGELES, June 4, 2009 –
Guess?, Inc. (NYSE: GES) today reported financial results for the first quarter
of its 2010 fiscal year, which ended May 2, 2009.
First Quarter Fiscal 2010
Results
For the
first quarter of fiscal 2010, the Company reported net earnings of $32.5
million, a decrease of 31.9% compared to net earnings of $47.8 million for the
first quarter of fiscal 2009. Diluted earnings per share decreased
30.0% to $0.35 in the current quarter, compared to $0.50 in the prior-year
quarter. The Company has reduced the current and prior year quarter’s
reported diluted earnings per share by $0.01 to reflect the impact of a new
accounting pronouncement related to certain participating shares.
Paul
Marciano, Chief Executive Officer, commented, “Our first quarter financial
results exceeded our expectations. We managed our business
effectively, reducing inventory levels and capital spending. We also
aggressively cut costs, which resulted in an improved SG&A rate, even with
lower sales. As a result, we generated solid operating cash flows,
further strengthening our capital structure.”
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 Europe and Asia where our brand
is well known but underpenetrated. We will continue to run the
business prudently and build the capabilities and infrastructure to support our
growth objectives in the future. Through these efforts, we expect to
emerge in an even stronger position when conditions ultimately
improve.”
Total net
revenue for the first quarter of fiscal 2010 decreased 9.8% to $441.2 million
from $489.2 million in the prior-year quarter. In constant dollars,
total net revenue was essentially flat. The Company’s retail stores
in North America generated revenue of $207.6 million in the first quarter of
fiscal 2010, a 2.0% decrease from $211.9 million in the same period a year
ago. Comparable store sales decreased 6.0% in local currency and
10.0% in US dollars for the first quarter of fiscal 2010, compared to the same
period a year ago. The Company operated 429 retail stores in the U.S.
and Canada at the end of the first quarter of fiscal 2010 versus 391 stores a
year earlier.
Net
revenue from the Company’s wholesale segment, which includes the Company’s Asian
operations, decreased 12.3% to $65.9 million in the first quarter of fiscal
2010, from $75.1 million in the prior-year period.
Net
revenue from the Company’s European segment decreased 18.5% to $145.7 million in
the first quarter of fiscal 2010, compared to $178.7 million in the prior-year
period.
Licensing
segment net revenue decreased 6.0% to $22.1 million in the first quarter of
fiscal 2010, from $23.5 million in the prior-year period.
Operating
earnings for the first quarter of fiscal 2010 decreased 36.7% to $48.0 million
from $75.9 million in the prior-year period. Operating margin in the
first quarter decreased 460 basis points to 10.9%, compared to the prior-year’s
quarter. This margin contraction was due to lower European product
margins, partially attributable to the impact of the stronger US dollar, lower
product margins in North America and occupancy deleverage due to the negative
comparable store sales, partially offset by SG&A leverage resulting from
strong expense management.
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 $13.00, totaling $5.3
million. As of May 2, 2009, the Company had remaining approval under
its existing repurchase program to purchase $134.2 million of its common
stock.
2
Outlook
The
Company’s expectations for the second quarter of fiscal 2010 ending August 1,
2009, are as follows:
|
|
-
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Consolidated
net revenues are expected to range from $465 million to $485
million.
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|
|
-
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Operating
margin is expected to be around
14%.
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|
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-
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Diluted
earnings per share are expected to be in the range of $0.42 to
$0.45.
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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 $0.10 per share on the Company’s common
stock. The dividend will be payable on July 2, 2009 to shareholders
of record at the close of business on June 17, 2009.
The
Company will hold a conference call at 4:30 pm (ET) on June 4, 2009 to discuss
the news announced in this press release. A live webcast of the
conference call will be accessible at www.guessinc.com
via the “Investor’s Info” link. The webcast will be archived on the
website for 30 days.
Guess?,
Inc. designs, markets, distributes and licenses a lifestyle collection of
contemporary apparel, denim, handbags, watches, footwear and other related
consumer products. As of May 2, 2009, the Company operated 429 retail
stores in the United States and Canada and 706 retail stores outside of North
America, of which 103 were directly owned. The Company also
distributes its products through better department and specialty stores around
the world. For more information about the Company, please visit
www.guessinc.com.
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
Securities and Exchange Commission, including but not limited to the risk
factors discussed therein, could cause actual results to differ materially from
current expectations.
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Contact:
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Guess?,
Inc.
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Investor Relations
(213)
765-5578
Source:
Guess?, Inc.
3
Guess?,
Inc. and Subsidiaries
Condensed
Consolidated Statements of Income
(dollars
in thousands, except per share data)
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Three
Months Ended
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||||||||||||||||
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May
2,
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May
3,
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|||||||||||||||
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2009
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2008
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|||||||||||||||
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$
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%
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$
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%
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|||||||||||||
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Net
revenue
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||||||||||||||||
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Product
sales
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$ | 419,127 | 95.0 | % | $ | 465,735 | 95.2 | % | ||||||||
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Net
royalties
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22,074 | 5.0 | % | 23,485 | 4.8 | % | ||||||||||
| 441,201 | 100.0 | % | 489,220 | 100.0 | % | |||||||||||
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Cost
of product sales
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263,698 | 59.8 | % | 267,981 | 54.8 | % | ||||||||||
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Gross
profit
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177,503 | 40.2 | % | 221,239 | 45.2 | % | ||||||||||
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Selling,
general and administrative expenses
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129,469 | 29.3 | % | 145,314 | 29.7 | % | ||||||||||
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Earnings
from operations
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48,034 | 10.9 | % | 75,925 | 15.5 | % | ||||||||||
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Other
(income) expense:
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||||||||||||||||
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Interest
expense
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606 | 0.1 | % | 1,025 | 0.2 | % | ||||||||||
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Interest
income
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(737 | ) | (0.2 | %) | (1,533 | ) | (0.3 | %) | ||||||||
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Other,
net
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(1,266 | ) | (0.2 | %) | 908 | 0.2 | % | |||||||||
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Earnings
before income taxes
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49,431 | 11.2 | % | 75,525 | 15.4 | % | ||||||||||
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Income
taxes
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16,312 | 3.7 | % | 27,189 | 5.5 | % | ||||||||||
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Net
earnings
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33,119 | 7.5 | % | 48,336 | 9.9 | % | ||||||||||
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Net
earnings attributable to noncontrolling interests in
subsidiaries
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577 | 0.1 | % | 535 | 0.1 | % | ||||||||||
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Net
earnings attributable to Guess?, Inc.
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$ | 32,542 | 7.4 | % | $ | 47,801 | 9.8 | % | ||||||||
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Earnings
per common share attributable to common stockholders:
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||||||||||||||||
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Basic
(1)
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$ | 0.35 | $ | 0.51 | ||||||||||||
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Diluted
(1)
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$ | 0.35 | $ | 0.50 | ||||||||||||
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Weighted
average common shares outstanding attributable to common
stockholders:
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||||||||||||||||
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Basic
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90,631 | 92,950 | ||||||||||||||
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Diluted
(1)
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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 $0.01 per share. The prior year's earnings per share
has been adjusted to reflect the change.
4
Consolidated
Segment Data
(dollars
in thousands)
|
Three
Months Ended
|
||||||||||||
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May
2,
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May
3,
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%
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||||||||||
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2009
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2008
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chg
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||||||||||
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Net
revenue:
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||||||||||||
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Retail
operations
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$ | 207,560 | $ | 211,937 | -2 | % | ||||||
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Wholesale
operations
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65,869 | 75,134 | -12 | % | ||||||||
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European
operations
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145,698 | 178,664 | -18 | % | ||||||||
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Licensing
operations
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22,074 | 23,485 | -6 | % | ||||||||
| $ | 441,201 | $ | 489,220 | -10 | % | |||||||
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Earnings
(loss) from operations:
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||||||||||||
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Retail
operations
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$ | 18,007 | $ | 22,844 | -21 | % | ||||||
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Wholesale
operations
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7,422 | 12,554 | -41 | % | ||||||||
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European
operations
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23,139 | 39,961 | -42 | % | ||||||||
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Licensing
operations
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19,015 | 20,247 | -6 | % | ||||||||
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Corporate
overhead
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(19,549 | ) | (19,681 | ) | -1 | % | ||||||
| $ | 48,034 | $ | 75,925 | -37 | % | |||||||
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Operating
margins:
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||||||||||||
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Retail
operations
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8.7 | % | 10.8 | % | ||||||||
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Wholesale
operations
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11.3 | % | 16.7 | % | ||||||||
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European
operations
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15.9 | % | 22.4 | % | ||||||||
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Licensing
operations
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86.1 | % | 86.2 | % | ||||||||
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Total
Company
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10.9 | % | 15.5 | % | ||||||||
5
Selected
Condensed Consolidated Balance Sheet Data
(in
thousands)
|
May
2,
|
January
31,
|
May
3,
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||||||||||
|
2009
|
2009
|
2008
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||||||||||
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ASSETS
|
||||||||||||
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Cash
and cash equivalents
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$ | 312,630 | $ | 294,118 | $ | 260,390 | ||||||
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Receivables,
net
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277,436 | 262,349 | 315,598 | |||||||||
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Inventories
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203,395 | 239,675 | 202,804 | |||||||||
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Other
current assets
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92,696 | 98,047 | 52,247 | |||||||||
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Property
and equipment, net
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235,607 | 221,416 | 237,193 | |||||||||
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Other
assets
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137,502 | 130,961 | 151,361 | |||||||||
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Total
Assets
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$ | 1,259,266 | $ | 1,246,566 | $ | 1,219,593 | ||||||
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LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||||||
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Current
portion of borrowings and capital lease obligations
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$ | 30,645 | $ | 24,018 | $ | 47,562 | ||||||
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Other
current liabilities
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276,531 | 311,866 | 309,083 | |||||||||
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Borrowings
and capital lease obligations
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14,327 | 14,586 | 18,453 | |||||||||
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Other
long-term liabilities
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114,979 | 110,592 | 124,946 | |||||||||
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Guess?,
Inc. stockholders' equity
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808,720 | 777,032 | 711,074 | |||||||||
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Noncontrolling
interests in subsidiaries
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14,064 | 8,472 | 8,475 | |||||||||
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Total
Liabilities and Stockholders' Equity
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$ | 1,259,266 | $ | 1,246,566 | $ | 1,219,593 | ||||||
6
Condensed
Consolidated Cash Flow Data
(in
thousands)
|
Three
Months Ended
|
||||||||
|
May
2,
|
May
3,
|
|||||||
|
2009
|
2008
|
|||||||
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Net
cash provided by operating activities
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$ | 43,067 | $ | 2,505 | ||||
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Net
cash used in investing activities
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(18,265 | ) | (26,573 | ) | ||||
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Net
cash (used in)/provided by financing activities
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(7,603 | ) | 7,626 | |||||
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Effect
of exchange rates on cash
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1,313 | 1,237 | ||||||
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Net
increase/(decrease) in cash and cash equivalents
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18,512 | (15,205 | ) | |||||
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Cash
and cash equivalents at the beginning of the year
|
294,118 | 275,595 | ||||||
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Cash
and cash equivalents at the end of the period
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$ | 312,630 | $ | 260,390 | ||||
|
Supplemental
information:
|
||||||||
|
Depreciation
and amortization
|
$ | 14,547 | $ | 13,813 | ||||
|
Rent
|
41,691 | 37,513 | ||||||
7
Retail
Store Data
U.S.
and Canada
|
Three
Months Ended
|
||||||||
|
May
2,
|
May
3,
|
|||||||
|
2009
|
2008
|
|||||||
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Number
of stores at the beginning of the year
|
425 | 373 | ||||||
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Store
openings
|
6 | 19 | ||||||
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Store
closures
|
(2 | ) | (1 | ) | ||||
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Number
of stores at the end of the period
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429 | 391 | ||||||
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Total
store square footage at the end of the period
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1,969,000 | 1,817,000 | ||||||
8