Stockholders' Equity and Redeemable Noncontrolling Interests

3 Months Ended

May 02, 2015

Stockholders' Equity and Redeemable Noncontrolling Interests [Abstract]

Stockholders' Equity and Redeemable Noncontrolling Interests

Stockholders’ Equity and Redeemable Noncontrolling Interests

A reconciliation of common stock outstanding, treasury stock and the total carrying amount of total stockholders’ equity, Guess?, Inc. stockholders’ equity and stockholders’ equity attributable to nonredeemable and redeemable noncontrolling interests for the fiscal year ended January 31, 2015 and three months ended May 2, 2015 is as follows (in thousands, except share data):

	Shares			Stockholders’ Equity
	Common Stock	Treasury Stock		Guess?, Inc. Stockholders’ Equity			Nonredeemable Noncontrolling Interests			Total			Redeemable Noncontrolling Interests
Balance at February 1, 2014	84,962,345	54,283,384		$	1,154,514		$	15,472		$	1,169,986		$	5,830
Net earnings	—	—		94,570			2,614			97,184			—
Foreign currency translation adjustment	—	—		(114,566		)	(2,141		)	(116,707		)	(788		)
Gain on derivative financial instruments designated as cash flow hedges, net of income tax of ($721)	—	—		7,270			—			7,270			—
Loss on marketable securities, net of income tax of $61	—	—		(106		)	—			(106		)	—
Prior service credit amortization and actuarial valuation loss and related amortization on defined benefit plans, net of income tax of $2,335	—	—		(5,862		)	—			(5,862		)	—
Issuance of common stock under stock compensation plans, net of tax effect	313,271	—		(1,937		)	—			(1,937		)	—
Issuance of stock under Employee Stock Purchase Plan	47,538	(47,538	)	1,008			—			1,008			—
Share-based compensation	—	—		15,342			—			15,342			—
Dividends	—	—		(76,982		)	—			(76,982		)	—
Noncontrolling interest capital distribution	—	—		—			(355		)	(355		)	—
Redeemable noncontrolling interest redemption value adjustment	—	—		605			—			605			(605		)
Balance at January 31, 2015	85,323,154	54,235,846		$	1,073,856		$	15,590		$	1,089,446		$	4,437
Netearnings	—	—		3,341			646			3,987			—
Foreign currency translation adjustment	—	—		(339		)	(364		)	(703		)	(140		)
Loss on derivative financial instruments designated as cash flow hedges, net of income tax of $670	—	—		(2,861		)	—			(2,861		)	—
Loss on marketable securities, net of income tax of $3	—	—		(4		)	—			(4		)	—
Prior service credit and actuarial valuation amortization on defined benefit plans, net of income tax of ($149)	—	—		306			—			306			—
Issuance of common stock under stock compensation plans, net of tax effect	367,744	—		(471		)	—			(471		)	—
Issuance of stock under Employee Stock Purchase Plan	10,223	(10,223	)	162			—			162			—
Share-based compensation	—	—		3,612			—			3,612			—
Dividends	—	—		(19,286		)	—			(19,286		)	—
Noncontrolling interest capital distribution	—	—		—			(3,830		)	(3,830		)	—
Redeemable noncontrolling interest redemption value adjustment	—	—		235			—			235			(235		)
Balance at May 2, 2015	85,701,121	54,225,623		$	1,058,551		$	12,042		$	1,070,593		$	4,062

Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income (loss), net of related income taxes, for the three months ended May 2, 2015 and May 3, 2014 are as follows (in thousands):

	Three Months Ended May 2, 2015
	Foreign Currency Translation Adjustment			Derivative Financial Instruments Designated as Cash Flow Hedges			Marketable Securities			Defined Benefit Plans			Total
Balance at January 31, 2015	$	(121,569	)	$	7,157		$	(3	)	$	(12,650	)	$	(127,065	)
Losses arising during the period	(339		)	(926		)	(4		)	—			(1,269		)
Reclassification to net earnings for (gains) losses realized	—			(1,935		)	—			306			(1,629		)
Net other comprehensive income (loss)	(339		)	(2,861		)	(4		)	306			(2,898		)
Balance at May 2, 2015	$	(121,908	)	$	4,296		$	(7	)	$	(12,344	)	$	(129,963	)

	Three Months Ended May 3, 2014
	Foreign Currency Translation Adjustment			Derivative Financial Instruments Designated as Cash Flow Hedges			Marketable Securities			Defined Benefit Plans			Total
Balance at February 1, 2014	$	(7,003	)	$	(113	)	$	103		$	(6,788	)	$	(13,801	)
Gains (losses) arising during the period	21,849			(2,058		)	(16		)	—			19,775
Reclassification to net loss for (gains) losses realized	—			504			(54		)	109			559
Net other comprehensive income (loss)	21,849			(1,554		)	(70		)	109			20,334
Balance at May 3, 2014	$	14,846		$	(1,667	)	$	33		$	(6,679	)	$	6,533

Details on reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) during the three months ended May 2, 2015 and May 3, 2014 are as follows (in thousands):

	Three Months Ended						Location of (Gain) Loss Reclassified from Accumulated OCI into Earnings (Loss)
	May 2, 2015			May 3, 2014
Derivative financial instruments designated as cash flow hedges:
Foreign exchange currency contracts	$	(1,750	)	$	494		Cost of product sales
Foreign exchange currency contracts	(486		)	31			Other income/expense
Less income tax effect	301			(21		)	Income tax expense (benefit)
	(1,935		)	504
Marketable securities:
Available-for-sale securities	—			(87		)	Other income/expense
Less income tax effect	—			33			Income tax expense (benefit)
	—			(54		)
Defined benefit plans:
Actuarial loss amortization	513			234			(1)
Prior service credit amortization	(58		)	(58		)	(1)
Less income tax effect	(149		)	(67		)	Income tax expense (benefit)
	306			109
Total reclassifications during the period	$	(1,629	)	$	559

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(1) These accumulated other comprehensive income (loss) components are included in the computation of net periodic defined benefit pension cost. Refer to Note 13 for further information.

Redeemable Noncontrolling Interests

The Company is party to a put arrangement with respect to the common securities that represent the remaining noncontrolling interest from the acquisition of its majority-owned subsidiary, Guess Sud SAS (“Guess Sud”). The put arrangement for Guess Sud, representing 40% of the total outstanding equity interest of that subsidiary, may be exercised at the discretion of the noncontrolling interest holders by providing written notice to the Company any time after January 30, 2012. The put arrangement is recorded on the balance sheet at its expected redemption value based on a method which approximates fair value and classified as a redeemable noncontrolling interest outside of permanent equity. The redemption value of the Guess Sud redeemable put arrangement was $3.2 million and $3.4 million as of May 2, 2015 and January 31, 2015, respectively.

The Company is also party to a put arrangement with respect to the common securities that represent the remaining noncontrolling interest for its majority-owned subsidiary, Guess Brasil Comércio e Distribuição S.A. (“Guess Brazil”), which was established through a majority-owned joint venture during fiscal 2014. The put arrangement for Guess Brazil, representing 40% of the total outstanding equity interest of that subsidiary, may be exercised at the discretion of the noncontrolling interest holder by providing written notice to the Company beginning in the sixth year of the agreement, or sooner in certain limited circumstances, and every third anniversary from the end of the sixth year thereafter subject to certain time restrictions. The redemption value of the Guess Brazil put arrangement is based on a multiple of Guess Brazil’s earnings before interest, taxes, depreciation and amortization subject to certain adjustments. The carrying value of the redeemable noncontrolling interest related to Guess Brazil was $0.9 million and $1.0 million as of May 2, 2015 and January 31, 2015, respectively.