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: | |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | 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 19, 2014 (financial results for the quarter and year ended February 1, 2014) |
Dated: March 19, 2014 | GUESS?, INC. | |
By: | /s/ Sandeep Reddy | |
Sandeep Reddy Chief Financial Officer |
Exhibit No. | Description | |
99.1 | Press Release of Guess?, Inc. dated March 19, 2014 (financial results for the quarter and year ended February 1, 2014) |
Exhibit 99.1 |
• | North American Retail revenues decreased 6%; retail comp sales decreased 4% |
• | European revenues decreased 4% in U.S. dollars and 8% in local currency |
• | Asian revenues decreased 1% in U.S. dollars and 3% in constant currency |
• | Adjusted operating earnings decreased 13%; GAAP operating earnings decreased 15% |
• | Global revenues decreased 3% at $2.6 billion in U.S. dollars; decreased 4% in constant currency |
• | Adjusted operating earnings decreased 14%; GAAP operating earnings decreased 19% |
• | Invested $22.1 million to repurchase 0.9 million shares |
• | The Company's retail stores in North America generated revenue of $329.0 million in the fourth quarter of fiscal 2014, a 6.0% decrease from $350.0 million in the same period a year ago. Comparable store sales for the fourth quarter of fiscal year 2014 decreased 4.4% in U.S. dollars and 3.0% in constant currency compared to the same period a year ago. The Company directly operated 494 retail stores in the United States and Canada at the end of the fourth quarter of fiscal 2014 versus 512 retail stores a year earlier. |
• | Net revenue from the Company's Europe segment decreased 4.4% to $287.1 million in the fourth quarter of fiscal 2014, from $300.3 million in the prior-year period. In local currency, net revenue decreased 7.8%. |
• | Net revenue from the Company's Asia segment decreased 1.4% to $83.0 million in the fourth quarter of fiscal 2014, from $84.2 million in the prior-year period. In constant currency, net revenue decreased 2.7%. |
• | Net revenue from the Company's North American Wholesale segment decreased 19.9% to $40.8 million in the fourth quarter of fiscal 2014, from $50.9 million in the prior-year period. In constant currency, net revenue decreased 18.5%. |
• | Licensing segment net revenue decreased 4.6% to $28.4 million in the fourth quarter of fiscal 2014, from $29.8 million in the prior-year period. |
• | The Company's retail stores in North America generated revenue of $1.08 billion in fiscal 2014, a decrease of 3.7% from $1.12 billion in the prior year. Comparable store sales for fiscal year 2014 decreased 5.3% in U.S. dollars and 4.4% in constant currency compared to the prior year. |
• | Net revenue from the Company's Europe segment decreased 3.8% to $903.8 million in fiscal year 2014, compared to $939.6 million in the prior year. In local currency, net revenue decreased 7.2%. |
• | Net revenue from the Company's Asia segment increased 0.7% to $292.7 million in fiscal year 2014, compared to $290.7 million in the prior year. In constant currency, net revenue decreased 1.2%. |
• | Net revenue from the Company's North American Wholesale segment decreased 7.6% to $179.6 million in fiscal year 2014, from $194.4 million in the prior year. In constant currency, net revenue decreased 7.1%. |
• | Licensing segment net revenue increased 0.9% to $118.2 million in fiscal year 2014, from $117.1 million in the prior year. |
• | Consolidated net revenues are expected to range from $520 million to $535 million. |
• | Operating margin is expected to be between minus 1.5% and minus 0.5%. |
• | Diluted net loss per share is expected to be in the range of $0.09 to $0.05. |
• | Consolidated net revenues are expected to range from $2.53 billion to $2.58 billion. |
• | Operating margin is expected to be between 7.0% and 8.0%. |
• | Diluted earnings per share are expected to be in the range of $1.40 to $1.60. |
Contact: | Guess?, Inc. | |
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 1 | Twelve Months Ended 1 | |||||||||||||||||||||||||||
February 1, 2014 | February 2, 2013 | February 1, 2014 | February 2, 2013 | |||||||||||||||||||||||||
$ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||
Product sales | $ | 739,941 | 96.3 | % | $ | 785,340 | 96.3 | % | $ | 2,451,580 | 95.4 | % | $ | 2,541,463 | 95.6 | % | ||||||||||||
Net royalties | 28,422 | 3.7 | % | 29,778 | 3.7 | % | 118,206 | 4.6 | % | 117,142 | 4.4 | % | ||||||||||||||||
Net revenue | 768,363 | 100.0 | % | 815,118 | 100.0 | % | 2,569,786 | 100.0 | % | 2,658,605 | 100.0 | % | ||||||||||||||||
Cost of product sales | 466,414 | 60.7 | % | 482,240 | 59.2 | % | 1,593,652 | 62.0 | % | 1,591,482 | 59.9 | % | ||||||||||||||||
Gross profit | 301,949 | 39.3 | % | 332,878 | 40.8 | % | 976,134 | 38.0 | % | 1,067,123 | 40.1 | % | ||||||||||||||||
Selling, general and administrative expenses | 197,339 | 25.7 | % | 212,912 | 26.1 | % | 741,105 | 28.9 | % | 792,598 | 29.8 | % | ||||||||||||||||
Restructuring charges | 2,087 | 0.3 | % | — | 0.0 | % | 12,442 | 0.4 | % | — | 0.0 | % | ||||||||||||||||
Earnings from operations | 102,523 | 13.3 | % | 119,966 | 14.7 | % | 222,587 | 8.7 | % | 274,525 | 10.3 | % | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||
Interest expense | (581 | ) | (0.1 | %) | (435 | ) | (0.1 | %) | (1,923 | ) | (0.1 | %) | (1,640 | ) | (0.0 | %) | ||||||||||||
Interest income | 403 | 0.1 | % | 507 | 0.1 | % | 2,015 | 0.1 | % | 2,016 | 0.1 | % | ||||||||||||||||
Other, net | 1,338 | 0.2 | % | (52 | ) | (0.0 | %) | 10,280 | 0.4 | % | 5,713 | 0.2 | % | |||||||||||||||
Earnings before income taxes | 103,683 | 13.5 | % | 119,986 | 14.7 | % | 232,959 | 9.1 | % | 280,614 | 10.6 | % | ||||||||||||||||
Income taxes | 32,586 | 4.2 | % | 46,121 | 5.6 | % | 75,248 | 3.0 | % | 99,128 | 3.8 | % | ||||||||||||||||
Net earnings | 71,097 | 9.3 | % | 73,865 | 9.1 | % | 157,711 | 6.1 | % | 181,486 | 6.8 | % | ||||||||||||||||
Net earnings attributable to noncontrolling interests | 1,465 | 0.2 | % | 1,313 | 0.2 | % | 4,277 | 0.1 | % | 2,742 | 0.1 | % | ||||||||||||||||
Net earnings attributable to Guess?, Inc. | $ | 69,632 | 9.1 | % | $ | 72,552 | 8.9 | % | $ | 153,434 | 6.0 | % | $ | 178,744 | 6.7 | % | ||||||||||||
Net earnings per common share attributable to common stockholders: | ||||||||||||||||||||||||||||
Basic | $ | 0.82 | $ | 0.85 | $ | 1.81 | $ | 2.06 | ||||||||||||||||||||
Diluted | $ | 0.82 | $ | 0.85 | $ | 1.80 | $ | 2.05 | ||||||||||||||||||||
Weighted average common shares outstanding attributable to common stockholders: | ||||||||||||||||||||||||||||
Basic | 84,275 | 84,606 | 84,271 | 86,262 | ||||||||||||||||||||||||
Diluted | 84,596 | 84,836 | 84,522 | 86,540 | ||||||||||||||||||||||||
Adjusted earnings from operations 2: | ||||||||||||||||||||||||||||
$ | 104,610 | 13.6 | % | $ | 119,966 | 14.7 | % | $ | 235,029 | 9.1 | % | $ | 274,525 | 10.3 | % | |||||||||||||
Adjusted net earnings attributable to Guess?, Inc. 2: | ||||||||||||||||||||||||||||
$ | 71,064 | 9.2 | % | $ | 81,350 | 10.0 | % | $ | 162,471 | 6.3 | % | $ | 187,542 | 7.1 | % | |||||||||||||
Adjusted diluted earnings per common share attributable to common stockholders 2: | ||||||||||||||||||||||||||||
$ | 0.83 | $ | 0.95 | $ | 1.91 | $ | 2.15 | |||||||||||||||||||||
Notes: | ||||||||||||||||||||||||||||
1 | The three and twelve months ended February 1, 2014 contain 13 and 52 weeks, respectively. The three and twelve months ended February 2, 2013 contain 14 and 53 weeks, respectively. | |||||||||||||||||||||||||||
2 | The adjusted results for fiscal 2014 reflect the exclusion of restructuring charges (and related taxes where applicable) recorded during the three and twelve months ended February 1, 2014. The adjusted results for fiscal 2013 reflect the exclusion of a tax settlement charge recorded during the three and twelve months ended February 2, 2013. 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 | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||
The following table provides reconciliations of reported GAAP earnings from operations to adjusted earnings from operations, reported GAAP net earnings attributable to Guess?, Inc. to adjusted net earnings attributable to Guess?, Inc. and reported GAAP income taxes to adjusted income taxes for the three and twelve months ended February 1, 2014 and February 2, 2013. | |||||||||||||||||||||
Three Months Ended 1 | Twelve Months Ended 1 | ||||||||||||||||||||
February 1, | February 2, | February 1, | February 2, | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Reported GAAP earnings from operations | $ | 102,523 | $ | 119,966 | $ | 222,587 | $ | 274,525 | |||||||||||||
Restructuring charges 2 | 2,087 | — | 12,442 | — | |||||||||||||||||
Adjusted earnings from operations | $ | 104,610 | $ | 119,966 | $ | 235,029 | $ | 274,525 | |||||||||||||
Reported GAAP net earnings attributable to Guess?, Inc. | $ | 69,632 | $ | 72,552 | $ | 153,434 | $ | 178,744 | |||||||||||||
Restructuring charges 2 | 2,087 | — | 12,442 | — | |||||||||||||||||
Income tax adjustments and charges 3 | (655 | ) | 8,798 | (3,405 | ) | 8,798 | |||||||||||||||
Total adjustments affecting net earnings attributable to Guess?, Inc. | 1,432 | 8,798 | 9,037 | 8,798 | |||||||||||||||||
Adjusted net earnings attributable to Guess?, Inc. | $ | 71,064 | $ | 81,350 | $ | 162,471 | $ | 187,542 | |||||||||||||
Reported GAAP income taxes | $ | 32,586 | $ | 46,121 | $ | 75,248 | $ | 99,128 | |||||||||||||
Income tax adjustments and charges 3 | 655 | (8,798 | ) | 3,405 | (8,798 | ) | |||||||||||||||
Adjusted income taxes | $ | 33,241 | $ | 37,323 | $ | 78,653 | $ | 90,330 | |||||||||||||
Adjusted income tax rate | 31.4 | % | 31.1 | % | 32.1 | % | 32.2 | % | |||||||||||||
Notes: | |||||||||||||||||||||
1 | The three and twelve months ended February 1, 2014 contain 13 and 52 weeks, respectively. The three and twelve months ended February 2, 2013 contain 14 and 53 weeks, respectively. | ||||||||||||||||||||
2 | 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. | ||||||||||||||||||||
3 | The three and twelve months ended February 1, 2014 reflect an adjustment for the income tax effect of the restructuring charges discussed above, and was based on the Company's assessment of deductibility using the statutory tax rate of the tax jurisdiction in which the charges were incurred. In January 2013, the Company settled a tax audit dispute in Italy, resulting in a tax settlement charge of $12.8 million in the three and twelve months ended February 2, 2013, net of amounts previously reserved. This charge was partially offset by unrelated tax benefits of $4.0 million. | ||||||||||||||||||||
Guess?, Inc. and Subsidiaries | ||||||||||||||||||||||||
Consolidated Segment Data | ||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Three Months Ended 1 | Twelve Months Ended 1 | |||||||||||||||||||||||
February 1, | February 2, | % | February 1, | February 2, | % | |||||||||||||||||||
2014 | 2013 | chg | 2014 | 2013 | chg | |||||||||||||||||||
Net revenue: | ||||||||||||||||||||||||
North American Retail | $ | 329,031 | $ | 349,962 | (6%) | $ | 1,075,475 | $ | 1,116,836 | (4%) | ||||||||||||||
Europe | 287,084 | 300,273 | (4%) | 903,791 | 939,599 | (4%) | ||||||||||||||||||
Asia | 83,003 | 84,156 | (1%) | 292,714 | 290,655 | 1% | ||||||||||||||||||
North American Wholesale | 40,823 | 50,949 | (20%) | 179,600 | 194,373 | (8%) | ||||||||||||||||||
Licensing | 28,422 | 29,778 | (5%) | 118,206 | 117,142 | 1% | ||||||||||||||||||
$ | 768,363 | $ | 815,118 | (6%) | $ | 2,569,786 | $ | 2,658,605 | (3%) | |||||||||||||||
Earnings (loss) from operations: | ||||||||||||||||||||||||
North American Retail | $ | 27,177 | $ | 35,582 | (24%) | $ | 39,540 | $ | 78,285 | (49%) | ||||||||||||||
Europe | 49,636 | 52,300 | (5%) | 97,231 | 103,975 | (6%) | ||||||||||||||||||
Asia | 7,695 | 8,832 | (13%) | 25,592 | 26,525 | (4%) | ||||||||||||||||||
North American Wholesale | 9,542 | 13,073 | (27%) | 38,771 | 45,008 | (14%) | ||||||||||||||||||
Licensing | 27,329 | 26,624 | 3% | 107,805 | 101,182 | 7% | ||||||||||||||||||
Corporate Overhead | (16,769 | ) | (16,445 | ) | 2% | (73,910 | ) | (80,450 | ) | (8%) | ||||||||||||||
Restructuring Charges | (2,087 | ) | — | (12,442 | ) | — | ||||||||||||||||||
$ | 102,523 | $ | 119,966 | (15%) | $ | 222,587 | $ | 274,525 | (19%) | |||||||||||||||
Operating margins: | ||||||||||||||||||||||||
North American Retail | 8.3 | % | 10.2 | % | 3.7 | % | 7.0 | % | ||||||||||||||||
Europe | 17.3 | % | 17.4 | % | 10.8 | % | 11.1 | % | ||||||||||||||||
Asia | 9.3 | % | 10.5 | % | 8.7 | % | 9.1 | % | ||||||||||||||||
North American Wholesale | 23.4 | % | 25.7 | % | 21.6 | % | 23.2 | % | ||||||||||||||||
Licensing | 96.2 | % | 89.4 | % | 91.2 | % | 86.4 | % | ||||||||||||||||
Total Company before restructuring charges | 13.6 | % | 14.7 | % | 9.1 | % | 10.3 | % | ||||||||||||||||
Total Company including restructuring charges | 13.3 | % | 14.7 | % | 8.7 | % | 10.3 | % | ||||||||||||||||
Note: | ||||||||||||||||||||||||
1 | The three and twelve months ended February 1, 2014 contain 13 and 52 weeks, respectively. The three and twelve months ended February 2, 2013 contain 14 and 53 weeks, respectively. |
Guess?, Inc. and Subsidiaries | ||||||||||||||
Selected Condensed Consolidated Balance Sheet Data | ||||||||||||||
(in thousands) | ||||||||||||||
February 1, | February 2, | |||||||||||||
2014 | 2013 | |||||||||||||
ASSETS | ||||||||||||||
Cash and cash equivalents | $ | 502,945 | $ | 329,021 | ||||||||||
Short-term investments | 5,123 | 6,906 | ||||||||||||
Receivables, net | 276,565 | 316,863 | ||||||||||||
Inventories | 350,899 | 369,712 | ||||||||||||
Other current assets | 80,554 | 84,723 | ||||||||||||
Property and equipment, net | 324,606 | 355,729 | ||||||||||||
Other assets | 223,739 | 250,552 | ||||||||||||
Total Assets | $ | 1,764,431 | $ | 1,713,506 | ||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||
Current portion of capital lease obligations and borrowings | $ | 4,160 | $ | 1,901 | ||||||||||
Other current liabilities | 365,865 | 383,065 | ||||||||||||
Capital lease obligations and other long-term debt | 7,580 | 8,314 | ||||||||||||
Other long-term liabilities | 211,010 | 216,214 | ||||||||||||
Redeemable and nonredeemable noncontrolling interests | 21,302 | 17,020 | ||||||||||||
Guess?, Inc. stockholders' equity | 1,154,514 | 1,086,992 | ||||||||||||
Total Liabilities and Stockholders' Equity | $ | 1,764,431 | $ | 1,713,506 |
Guess?, Inc. and Subsidiaries | ||||||||||||||
Condensed Consolidated Cash Flow Data | ||||||||||||||
(in thousands) | ||||||||||||||
Twelve Months Ended | ||||||||||||||
February 1, | February 2, | |||||||||||||
2014 | 2013 | |||||||||||||
Net cash provided by operating activities | $ | 327,942 | $ | 268,904 | ||||||||||
Net cash used in investing activities | (63,076 | ) | (120,262 | ) | ||||||||||
Net cash used in financing activities | (84,807 | ) | (318,283 | ) | ||||||||||
Effect of exchange rates on cash | (6,135 | ) | 6,857 | |||||||||||
Net change in cash and cash equivalents | 173,924 | (162,784 | ) | |||||||||||
Cash and cash equivalents at the beginning of the year | 329,021 | 491,805 | ||||||||||||
Cash and cash equivalents at the end of the year | $ | 502,945 | $ | 329,021 | ||||||||||
Supplemental information: | ||||||||||||||
Depreciation and amortization | $ | 88,369 | $ | 89,698 | ||||||||||
Rent | $ | 283,543 | $ | 273,436 |
Guess?, Inc. and Subsidiaries | ||||||||||||||
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow | ||||||||||||||
(in thousands) | ||||||||||||||
Twelve Months Ended | ||||||||||||||
February 1, | February 2, | |||||||||||||
2014 | 2013 | |||||||||||||
Net cash provided by operating activities | $ | 327,942 | $ | 268,904 | ||||||||||
Less: Purchases of property and equipment | (75,438 | ) | (99,591 | ) | ||||||||||
Free cash flow | $ | 252,504 | $ | 169,313 | ||||||||||
Guess?, Inc. and Subsidiaries | ||||||||||
Retail Store Data | ||||||||||
International Store Count | ||||||||||
As of February 1, 2014 | As of February 2, 2013 | |||||||||
Total | Directly Operated | Total | Directly Operated | |||||||
Region | Stores | Stores | Stores | Stores | ||||||
United States and Canada | 494 | 494 | 512 | 512 | ||||||
Europe and the Middle East | 627 | 263 | 622 | 240 | ||||||
Asia | 499 | 47 | 470 | 48 | ||||||
Central and South America | 88 | 36 | 86 | 32 | ||||||
1,708 | 840 | 1,690 | 832 | |||||||
Guess?, Inc. and Subsidiaries | ||||||||||
Retail Store Data | ||||||||||
U.S. and Canada | ||||||||||
Twelve Months Ended | ||||||||||
February 1, | February 2, | |||||||||
2014 | 2013 | |||||||||
Number of stores at the beginning of the year | 512 | 504 | ||||||||
Store openings | 13 | 33 | ||||||||
Store closures | (31) | (25) | ||||||||
Number of stores at the end of the year | 494 | 512 | ||||||||
Total store square footage at the end of the year | 2,329,000 | 2,371,000 |
Guess?, Inc. and Subsidiaries | ||||||||||||||
Retail Store Change In Comparable Store Sales | ||||||||||||||
U.S. and Canada | ||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||
May 4, | August 3, | October 2, | February 1, | February 1, | ||||||||||
2013 | 2013 | 2013 | 2014 | 2014 | ||||||||||
Change in comparable store sales: | ||||||||||||||
Excluding e-commerce sales (as reported) | (9.8%) | (2.0%) | (5.0%) | (4.4%) | (5.3%) | |||||||||
Impact of e-commerce sales | 1.1% | 1.0% | 1.5% | 2.3% | 1.6% | |||||||||
Including e-commerce sales | (8.7%) | (1.0%) | (3.5%) | (2.1%) | (3.7%) | |||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||
May 4, | August 3, | October 2, | February 1, | February 1, | ||||||||||
2013 | 2013 | 2013 | 2014 | 2014 | ||||||||||
Change in comparable store sales (in constant currency): | ||||||||||||||
Excluding e-commerce sales (as reported) | (9.3%) | (1.7%) | (4.0%) | (3.0%) | (4.4%) | |||||||||
Impact of e-commerce sales | 1.1% | 1.0% | 1.5% | 2.3% | 1.6% | |||||||||
Including e-commerce sales | (8.2%) | (0.7%) | (2.5%) | (0.7%) | (2.8%) | |||||||||