Delaware | 95-3679695 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
1444 South Alameda Street | |
Los Angeles, California | 90021 |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer x | Accelerated filer o |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Emerging growth company o | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o |
GUESS?, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) | |||||||
Oct 28, 2017 | Jan 28, 2017 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 233,089 | $ | 396,129 | |||
Accounts receivable, net | 236,659 | 225,537 | |||||
Inventories | 477,177 | 367,381 | |||||
Other current assets | 59,658 | 54,965 | |||||
Total current assets | 1,006,583 | 1,044,012 | |||||
Property and equipment, net | 283,197 | 243,005 | |||||
Goodwill | 36,609 | 34,100 | |||||
Other intangible assets, net | 5,912 | 6,504 | |||||
Deferred tax assets | 83,620 | 82,793 | |||||
Restricted cash | 225 | 1,521 | |||||
Other assets | 137,366 | 122,550 | |||||
$ | 1,553,512 | $ | 1,534,485 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Current portion of capital lease obligations and borrowings | $ | 2,121 | $ | 566 | |||
Accounts payable | 241,909 | 209,616 | |||||
Accrued expenses | 145,912 | 135,271 | |||||
Total current liabilities | 389,942 | 345,453 | |||||
Long-term debt and capital lease obligations | 38,781 | 23,482 | |||||
Deferred rent and lease incentives | 80,689 | 80,209 | |||||
Other long-term liabilities | 98,531 | 99,895 | |||||
607,943 | 549,039 | ||||||
Redeemable noncontrolling interests | 5,475 | 4,452 | |||||
Commitments and contingencies (Note 12) | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $.01 par value. Authorized 10,000,000 shares; no shares issued and outstanding | — | — | |||||
Common stock, $.01 par value. Authorized 150,000,000 shares; issued 141,161,026 and 140,509,974 shares, outstanding 82,843,115 and 84,069,492 shares, as of October 28, 2017 and January 28, 2017, respectively | 828 | 841 | |||||
Paid-in capital | 492,542 | 480,435 | |||||
Retained earnings | 1,149,023 | 1,215,079 | |||||
Accumulated other comprehensive loss | (125,924 | ) | (161,389 | ) | |||
Treasury stock, 58,317,911 and 56,440,482 shares as of October 28, 2017 and January 28, 2017, respectively | (590,128 | ) | (565,744 | ) | |||
Guess?, Inc. stockholders’ equity | 926,341 | 969,222 | |||||
Nonredeemable noncontrolling interests | 13,753 | 11,772 | |||||
Total stockholders’ equity | 940,094 | 980,994 | |||||
$ | 1,553,512 | $ | 1,534,485 |
GUESS?, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (in thousands, except per share data) (unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
Oct 28, 2017 | Oct 29, 2016 | Oct 28, 2017 | Oct 29, 2016 | ||||||||||||
Product sales | $ | 528,209 | $ | 512,553 | $ | 1,518,323 | $ | 1,462,029 | |||||||
Net royalties | 25,929 | 23,768 | 68,088 | 68,066 | |||||||||||
Net revenue | 554,138 | 536,321 | 1,586,411 | 1,530,095 | |||||||||||
Cost of product sales | 363,029 | 356,079 | 1,052,633 | 1,021,462 | |||||||||||
Gross profit | 191,109 | 180,242 | 533,778 | 508,633 | |||||||||||
Selling, general and administrative expenses | 178,552 | 164,317 | 519,497 | 500,066 | |||||||||||
Net (gains) losses on lease terminations | 11,494 | — | 11,494 | (695 | ) | ||||||||||
Asset impairment charges | 2,018 | 802 | 6,013 | 1,457 | |||||||||||
Restructuring charges | — | — | — | 6,083 | |||||||||||
Earnings (loss) from operations | (955 | ) | 15,123 | (3,226 | ) | 1,722 | |||||||||
Other income (expense): | |||||||||||||||
Interest expense | (684 | ) | (500 | ) | (1,642 | ) | (1,478 | ) | |||||||
Interest income | 891 | 861 | 3,022 | 1,763 | |||||||||||
Other income, net | 2,759 | 125 | 3,561 | 26,417 | |||||||||||
2,966 | 486 | 4,941 | 26,702 | ||||||||||||
Earnings before income tax expense | 2,011 | 15,609 | 1,715 | 28,424 | |||||||||||
Income tax expense | 3,673 | 5,880 | 8,723 | 11,682 | |||||||||||
Net earnings (loss) | (1,662 | ) | 9,729 | (7,008 | ) | 16,742 | |||||||||
Net earnings attributable to noncontrolling interests | 1,198 | 626 | 1,926 | 548 | |||||||||||
Net earnings (loss) attributable to Guess?, Inc. | $ | (2,860 | ) | $ | 9,103 | $ | (8,934 | ) | $ | 16,194 | |||||
Net earnings (loss) per common share attributable to common stockholders (Note 2): | |||||||||||||||
Basic | $ | (0.04 | ) | $ | 0.11 | $ | (0.12 | ) | $ | 0.19 | |||||
Diluted | $ | (0.04 | ) | $ | 0.11 | $ | (0.12 | ) | $ | 0.19 | |||||
Weighted average common shares outstanding attributable to common stockholders (Note 2): | |||||||||||||||
Basic | 82,390 | 83,758 | 82,599 | 83,631 | |||||||||||
Diluted | 82,390 | 83,917 | 82,599 | 83,813 | |||||||||||
Dividends declared per common share | $ | 0.225 | $ | 0.225 | $ | 0.675 | $ | 0.675 |
GUESS?, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) (unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
Oct 28, 2017 | Oct 29, 2016 | Oct 28, 2017 | Oct 29, 2016 | ||||||||||||
Net earnings (loss) | $ | (1,662 | ) | $ | 9,729 | $ | (7,008 | ) | $ | 16,742 | |||||
Other comprehensive income (loss) (“OCI”): | |||||||||||||||
Foreign currency translation adjustment | |||||||||||||||
Gains (losses) arising during the period | (9,102 | ) | (12,900 | ) | 47,770 | 14,530 | |||||||||
Derivative financial instruments designated as cash flow hedges | |||||||||||||||
Gains (losses) arising during the period | 3,387 | 4,181 | (11,702 | ) | (2,642 | ) | |||||||||
Less income tax effect | (638 | ) | (876 | ) | 1,482 | 684 | |||||||||
Reclassification to net earnings (loss) for (gains) losses realized | 313 | (727 | ) | (997 | ) | (3,274 | ) | ||||||||
Less income tax effect | (78 | ) | 134 | 50 | 655 | ||||||||||
Marketable securities | |||||||||||||||
Losses arising during the period | — | — | — | (4 | ) | ||||||||||
Less income tax effect | — | — | — | 3 | |||||||||||
Reclassification to net earnings for losses realized | — | 25 | — | 25 | |||||||||||
Less income tax effect | — | (9 | ) | — | (9 | ) | |||||||||
Defined benefit plans | |||||||||||||||
Foreign currency and other adjustments | 106 | 47 | 2 | (89 | ) | ||||||||||
Less income tax effect | (9 | ) | (5 | ) | — | 8 | |||||||||
Net actuarial loss amortization | 116 | 86 | 344 | 257 | |||||||||||
Prior service credit amortization | (7 | ) | (7 | ) | (20 | ) | (21 | ) | |||||||
Less income tax effect | (21 | ) | (18 | ) | (62 | ) | (56 | ) | |||||||
Total comprehensive income (loss) | (7,595 | ) | (340 | ) | 29,859 | 26,809 | |||||||||
Less comprehensive income (loss) attributable to noncontrolling interests: | |||||||||||||||
Net earnings | 1,198 | 626 | 1,926 | 548 | |||||||||||
Foreign currency translation adjustment | (918 | ) | (300 | ) | 1,402 | (1,004 | ) | ||||||||
Amounts attributable to noncontrolling interests | 280 | 326 | 3,328 | (456 | ) | ||||||||||
Comprehensive income (loss) attributable to Guess?, Inc. | $ | (7,875 | ) | $ | (666 | ) | $ | 26,531 | $ | 27,265 |
GUESS?, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) | |||||||
Nine Months Ended | |||||||
Oct 28, 2017 | Oct 29, 2016 | ||||||
Cash flows from operating activities: | |||||||
Net earnings (loss) | $ | (7,008 | ) | $ | 16,742 | ||
Adjustments to reconcile net earnings (loss) to net cash used in operating activities: | |||||||
Depreciation and amortization of property and equipment | 45,614 | 49,787 | |||||
Amortization of intangible assets | 1,155 | 1,407 | |||||
Share-based compensation expense | 12,410 | 12,768 | |||||
Unrealized forward contract (gains) losses | 1,532 | (1,455 | ) | ||||
Net (gain) loss on disposition of property and equipment and long-term assets | 4,548 | (20,231 | ) | ||||
Other items, net | (5,278 | ) | 4,675 | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 2,527 | (808 | ) | ||||
Inventories | (93,337 | ) | (114,783 | ) | |||
Prepaid expenses and other assets | (11,817 | ) | (10,047 | ) | |||
Accounts payable and accrued expenses | 21,411 | 32,449 | |||||
Deferred rent and lease incentives | 1,354 | 2,830 | |||||
Other long-term liabilities | (7,313 | ) | (3,567 | ) | |||
Net cash used in operating activities | (34,202 | ) | (30,233 | ) | |||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (65,345 | ) | (66,849 | ) | |||
Proceeds from sale of long-term assets | 1,052 | 43,399 | |||||
Changes in other assets | (553 | ) | — | ||||
Acquisition of businesses, net of cash acquired | (2,929 | ) | (1,635 | ) | |||
Net cash settlement of forward contracts | (354 | ) | (298 | ) | |||
Purchases of investments | (497 | ) | — | ||||
Net cash used in investing activities | (68,626 | ) | (25,383 | ) | |||
Cash flows from financing activities: | |||||||
Payment of debt issuance costs | — | (111 | ) | ||||
Proceeds from borrowings | 166 | 21,500 | |||||
Repayment of borrowings and capital lease obligations | (665 | ) | (4,608 | ) | |||
Dividends paid | (56,527 | ) | (57,369 | ) | |||
Purchase of redeemable noncontrolling interest | — | (4,445 | ) | ||||
Noncontrolling interest capital contribution | 962 | 2,157 | |||||
Noncontrolling interest capital distribution | (1,358 | ) | (2,759 | ) | |||
Issuance of common stock, net of tax withholdings on vesting of stock awards | (82 | ) | 411 | ||||
Purchase of treasury stock | (24,812 | ) | — | ||||
Net cash used in financing activities | (82,316 | ) | (45,224 | ) | |||
Effect of exchange rates on cash, cash equivalents and restricted cash | 20,808 | 4,766 | |||||
Net change in cash, cash equivalents and restricted cash | (164,336 | ) | (96,074 | ) | |||
Cash, cash equivalents and restricted cash at the beginning of the year | 397,650 | 445,999 | |||||
Cash, cash equivalents and restricted cash at the end of the period | $ | 233,314 | $ | 349,925 | |||
Supplemental cash flow data: | |||||||
Interest paid | $ | 849 | $ | 923 | |||
Income taxes paid | $ | 18,124 | $ | 15,619 | |||
Non-cash investing and financing activity: | |||||||
Assets acquired under capital lease obligations | $ | 18,042 | $ | — |
(1) | Basis of Presentation |
(2) | Earnings (Loss) Per Share |
Three Months Ended | Nine Months Ended | ||||||||||||||
Oct 28, 2017 | Oct 29, 2016 | Oct 28, 2017 | Oct 29, 2016 | ||||||||||||
Net earnings (loss) attributable to Guess?, Inc. | $ | (2,860 | ) | $ | 9,103 | $ | (8,934 | ) | $ | 16,194 | |||||
Less net earnings attributable to nonvested restricted stockholders | 186 | 126 | 581 | 411 | |||||||||||
Net earnings (loss) attributable to common stockholders | $ | (3,046 | ) | $ | 8,977 | $ | (9,515 | ) | $ | 15,783 | |||||
Weighted average common shares used in basic computations | 82,390 | 83,758 | 82,599 | 83,631 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Stock options and restricted stock units (1) | — | 159 | — | 182 | |||||||||||
Weighted average common shares used in diluted computations | 82,390 | 83,917 | 82,599 | 83,813 | |||||||||||
Net earnings (loss) per common share attributable to common stockholders: | |||||||||||||||
Basic | $ | (0.04 | ) | $ | 0.11 | $ | (0.12 | ) | $ | 0.19 | |||||
Diluted | $ | (0.04 | ) | $ | 0.11 | $ | (0.12 | ) | $ | 0.19 |
(1) | For the three and nine months ended October 28, 2017, there were 916,683 and 391,040, respectively, potentially dilutive shares that were not included in the computation of diluted weighted average common shares and common equivalent shares outstanding because their effect would have been antidilutive given the Company’s net loss. |
(3) | Stockholders’ Equity and Redeemable Noncontrolling Interests |
Shares | Stockholders’ Equity | ||||||||||||||||||||
Common Stock | Treasury Stock | Guess?, Inc. Stockholders’ Equity | Nonredeemable Noncontrolling Interests | Total | Redeemable Noncontrolling Interests | ||||||||||||||||
Balance at January 30, 2016 | 83,833,937 | 56,195,000 | $ | 1,018,475 | $ | 12,818 | $ | 1,031,293 | $ | 5,252 | |||||||||||
Net earnings | — | — | 22,761 | 2,637 | 25,398 | — | |||||||||||||||
Foreign currency translation adjustment | — | — | (575 | ) | (2,057 | ) | (2,632 | ) | 818 | ||||||||||||
Loss on derivative financial instruments designated as cash flow hedges, net of income tax of $864 | — | — | (1,852 | ) | — | (1,852 | ) | — | |||||||||||||
Other-than-temporary-impairment and unrealized loss on marketable securities, net of income tax of ($6) | — | — | 15 | — | 15 | — | |||||||||||||||
Actuarial valuation loss and related amortization, prior service credit amortization and foreign currency and other adjustments on defined benefit plans, net of income tax of $21 | — | — | (923 | ) | — | (923 | ) | — | |||||||||||||
Issuance of common stock under stock compensation plans, net of tax effect | 481,037 | — | (3,813 | ) | — | (3,813 | ) | — | |||||||||||||
Issuance of stock under Employee Stock Purchase Plan | 44,486 | (44,486 | ) | 558 | — | 558 | — | ||||||||||||||
Share-based compensation | — | — | 16,908 | — | 16,908 | — | |||||||||||||||
Dividends | — | — | (76,997 | ) | — | (76,997 | ) | — | |||||||||||||
Share repurchases | (289,968 | ) | 289,968 | (3,532 | ) | — | (3,532 | ) | — | ||||||||||||
Purchase of redeemable noncontrolling interest | — | — | (1,133 | ) | 1,133 | — | (4,445 | ) | |||||||||||||
Noncontrolling interest capital contribution | — | — | — | — | — | 2,157 | |||||||||||||||
Noncontrolling interest capital distribution | — | — | — | (2,759 | ) | (2,759 | ) | — | |||||||||||||
Redeemable noncontrolling interest redemption value adjustment | — | — | (670 | ) | — | (670 | ) | 670 | |||||||||||||
Balance at January 28, 2017 | 84,069,492 | 56,440,482 | $ | 969,222 | $ | 11,772 | $ | 980,994 | $ | 4,452 | |||||||||||
Net earnings (loss) | — | — | (8,934 | ) | 1,926 | (7,008 | ) | — | |||||||||||||
Foreign currency translation adjustment | — | — | 46,368 | 1,402 | 47,770 | 72 | |||||||||||||||
Loss on derivative financial instruments designated as cash flow hedges, net of income tax of $1,532 | — | — | (11,167 | ) | — | (11,167 | ) | — | |||||||||||||
Actuarial valuation and prior service credit amortization and foreign currency and other adjustments on defined benefit plans, net of income tax of ($62) | — | — | 264 | — | 264 | — | |||||||||||||||
Issuance of common stock under stock compensation plans, net of tax effect | 651,052 | — | (483 | ) | — | (483 | ) | — | |||||||||||||
Issuance of stock under Employee Stock Purchase Plan | 42,538 | (42,538 | ) | 401 | — | 401 | — | ||||||||||||||
Share-based compensation | — | — | 12,410 | — | 12,410 | — | |||||||||||||||
Dividends | — | — | (56,928 | ) | — | (56,928 | ) | — | |||||||||||||
Share repurchases | (1,919,967 | ) | 1,919,967 | (24,812 | ) | — | (24,812 | ) | — | ||||||||||||
Noncontrolling interest capital contribution | — | — | — | 11 | 11 | 951 | |||||||||||||||
Noncontrolling interest capital distribution | — | — | — | (1,358 | ) | (1,358 | ) | — | |||||||||||||
Balance at October 28, 2017 | 82,843,115 | 58,317,911 | $ | 926,341 | $ | 13,753 | $ | 940,094 | $ | 5,475 |
Three Months Ended Oct 28, 2017 | |||||||||||||||
Foreign Currency Translation Adjustment | Derivative Financial Instruments Designated as Cash Flow Hedges | Defined Benefit Plans | Total | ||||||||||||
Balance at July 29, 2017 | $ | (103,675 | ) | $ | (8,751 | ) | $ | (8,483 | ) | $ | (120,909 | ) | |||
Gains (losses) arising during the period | (8,184 | ) | 2,749 | 97 | (5,338 | ) | |||||||||
Reclassification to net loss for losses realized | — | 235 | 88 | 323 | |||||||||||
Net other comprehensive income (loss) | (8,184 | ) | 2,984 | 185 | (5,015 | ) | |||||||||
Balance at October 28, 2017 | $ | (111,859 | ) | $ | (5,767 | ) | $ | (8,298 | ) | $ | (125,924 | ) |
Nine Months Ended Oct 28, 2017 | |||||||||||||||
Foreign Currency Translation Adjustment | Derivative Financial Instruments Designated as Cash Flow Hedges | Defined Benefit Plans | Total | ||||||||||||
Balance at January 28, 2017 | $ | (158,227 | ) | $ | 5,400 | $ | (8,562 | ) | $ | (161,389 | ) | ||||
Gains (losses) arising during the period | 46,368 | (10,220 | ) | 2 | 36,150 | ||||||||||
Reclassification to net loss for (gains) losses realized | — | (947 | ) | 262 | (685 | ) | |||||||||
Net other comprehensive income (loss) | 46,368 | (11,167 | ) | 264 | 35,465 | ||||||||||
Balance at October 28, 2017 | $ | (111,859 | ) | $ | (5,767 | ) | $ | (8,298 | ) | $ | (125,924 | ) |
Three Months Ended Oct 29, 2016 | |||||||||||||||||||
Foreign Currency Translation Adjustment | Derivative Financial Instruments Designated as Cash Flow Hedges | Marketable Securities | Defined Benefit Plans | Total | |||||||||||||||
Balance at July 30, 2016 | $ | (129,518 | ) | $ | (37 | ) | $ | (16 | ) | $ | (7,643 | ) | $ | (137,214 | ) | ||||
Gains (losses) arising during the period | (12,600 | ) | 3,305 | — | 42 | (9,253 | ) | ||||||||||||
Reclassification to net earnings for (gains) losses realized | — | (593 | ) | 16 | 61 | (516 | ) | ||||||||||||
Net other comprehensive income (loss) | (12,600 | ) | 2,712 | 16 | 103 | (9,769 | ) | ||||||||||||
Balance at October 29, 2016 | $ | (142,118 | ) | $ | 2,675 | $ | — | $ | (7,540 | ) | $ | (146,983 | ) |
Nine Months Ended Oct 29, 2016 | |||||||||||||||||||
Foreign Currency Translation Adjustment | Derivative Financial Instruments Designated as Cash Flow Hedges | Marketable Securities | Defined Benefit Plans | Total | |||||||||||||||
Balance at January 30, 2016 | $ | (157,652 | ) | $ | 7,252 | $ | (15 | ) | $ | (7,639 | ) | $ | (158,054 | ) | |||||
Gains (losses) arising during the period | 15,534 | (1,958 | ) | (1 | ) | (81 | ) | 13,494 | |||||||||||
Reclassification to net earnings for (gains) losses realized | — | (2,619 | ) | 16 | 180 | (2,423 | ) | ||||||||||||
Net other comprehensive income (loss) | 15,534 | (4,577 | ) | 15 | 99 | 11,071 | |||||||||||||
Balance at October 29, 2016 | $ | (142,118 | ) | $ | 2,675 | $ | — | $ | (7,540 | ) | $ | (146,983 | ) |
Three Months Ended | Nine Months Ended | Location of (Gain) Loss Reclassified from Accumulated OCI into Earnings (Loss) | |||||||||||||||
Oct 28, 2017 | Oct 29, 2016 | Oct 28, 2017 | Oct 29, 2016 | ||||||||||||||
Derivative financial instruments designated as cash flow hedges: | |||||||||||||||||
Foreign exchange currency contracts | $ | (81 | ) | $ | (739 | ) | $ | (1,360 | ) | $ | (3,315 | ) | Cost of product sales | ||||
Foreign exchange currency contracts | 337 | (45 | ) | 244 | (126 | ) | Other income/expense | ||||||||||
Interest rate swap | 57 | 57 | 119 | 167 | Interest expense | ||||||||||||
Less income tax effect | (78 | ) | 134 | 50 | 655 | Income tax expense | |||||||||||
235 | (593 | ) | (947 | ) | (2,619 | ) | |||||||||||
Marketable securities: | |||||||||||||||||
Available-for-sale securities | — | 25 | — | 25 | Other income/expense | ||||||||||||
Less income tax effect | — | (9 | ) | — | (9 | ) | Income tax expense | ||||||||||
— | 16 | — | 16 | ||||||||||||||
Defined benefit plans: | |||||||||||||||||
Actuarial loss amortization | 116 | 86 | 344 | 257 | (1) | ||||||||||||
Prior service credit amortization | (7 | ) | (7 | ) | (20 | ) | (21 | ) | (1) | ||||||||
Less income tax effect | (21 | ) | (18 | ) | (62 | ) | (56 | ) | Income tax expense | ||||||||
88 | 61 | 262 | 180 | ||||||||||||||
Total reclassifications during the period | $ | 323 | $ | (516 | ) | $ | (685 | ) | $ | (2,423 | ) |
(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. |
(4) | Accounts Receivable |
Oct 28, 2017 | Jan 28, 2017 | ||||||
Trade | $ | 241,776 | $ | 234,690 | |||
Royalty | 22,970 | 19,881 | |||||
Other | 11,545 | 5,888 | |||||
276,291 | 260,459 | ||||||
Less allowances | 39,632 | 34,922 | |||||
$ | 236,659 | $ | 225,537 |
(5) | Inventories |
Oct 28, 2017 | Jan 28, 2017 | ||||||
Raw materials | $ | 509 | $ | 799 | |||
Work in progress | — | 78 | |||||
Finished goods | 476,668 | 366,504 | |||||
$ | 477,177 | $ | 367,381 |
(6) | Restructuring Charges |
Total | |||
Balance at January 30, 2016 | $ | — | |
Charges to operations | 6,083 | ||
Cash payments | (6,003 | ) | |
Foreign currency and other adjustments | 100 | ||
Balance at January 28, 2017 | $ | 180 | |
Cash payments | (124 | ) | |
Foreign currency and other adjustments | (56 | ) | |
Balance at October 28, 2017 | $ | — |
(7) | Income Taxes |
(8) | Segment Information |
Three Months Ended | Nine Months Ended | ||||||||||||||
Oct 28, 2017 | Oct 29, 2016 | Oct 28, 2017 | Oct 29, 2016 | ||||||||||||
Net revenue: | |||||||||||||||
Americas Retail | $ | 187,021 | $ | 215,862 | $ | 561,903 | $ | 646,573 | |||||||
Europe (1) | 221,230 | 186,289 | 641,833 | 532,847 | |||||||||||
Asia (1) | 74,322 | 63,617 | 200,436 | 171,255 | |||||||||||
Americas Wholesale (1) | 45,636 | 46,785 | 114,151 | 111,354 | |||||||||||
Licensing | 25,929 | 23,768 | 68,088 | 68,066 | |||||||||||
Total net revenue | $ | 554,138 | $ | 536,321 | $ | 1,586,411 | $ | 1,530,095 | |||||||
Earnings (loss) from operations: | |||||||||||||||
Americas Retail (1) | $ | (4,670 | ) | $ | (10,505 | ) | $ | (33,654 | ) | $ | (22,279 | ) | |||
Europe (1) | 6,678 | 11,597 | 30,749 | 16,221 | |||||||||||
Asia (1) | 2,718 | (1,962 | ) | 5,055 | (5,251 | ) | |||||||||
Americas Wholesale (1) | 8,241 | 8,142 | 20,011 | 18,211 | |||||||||||
Licensing (1) | 23,532 | 20,119 | 61,019 | 60,325 | |||||||||||
Total segment earnings from operations | 36,499 | 27,391 | 83,180 | 67,227 | |||||||||||
Corporate overhead (1) | (23,942 | ) | (11,466 | ) | (68,899 | ) | (58,660 | ) | |||||||
Net gains (losses) on lease terminations (1) (2) | (11,494 | ) | — | (11,494 | ) | 695 | |||||||||
Asset impairment charges (1) (3) | (2,018 | ) | (802 | ) | (6,013 | ) | (1,457 | ) | |||||||
Restructuring charges (4) | — | — | — | (6,083 | ) | ||||||||||
Total earnings (loss) from operations | $ | (955 | ) | $ | 15,123 | $ | (3,226 | ) | $ | 1,722 |
(1) | During the first quarter of fiscal 2018, net revenue and related costs and expenses for certain globally serviced customers were reclassified into the segment primarily responsible for the relationship. During the third quarter of fiscal 2018, segment results were also adjusted to exclude corporate performance-based compensation costs, net gains (losses) on lease terminations and asset impairment charges due to the fact that these items are no longer included in the segment results provided to the Company’s chief operating decision maker in order to allocate resources and assess performance. Accordingly, segment results have been adjusted for the nine months ended October 28, 2017 as well as the three and nine months ended October 29, 2016 to conform to the current period presentation. |
(2) | During the three and nine months ended October 28, 2017, the Company recorded net losses on lease terminations related primarily to the modification of certain lease agreements held with a common landlord in North America. During the nine months ended October 29, 2016, the Company recorded net gains on lease terminations related primarily to the early termination of certain lease agreements in Europe. The net gains on lease terminations were recorded during the first and second quarters of fiscal 2017. Refer to Note 1 for more information regarding the net gains (losses) on lease terminations. |
(3) | During each of the periods presented, the Company recognized asset impairment charges for certain retail locations resulting from under-performance and expected store closures. Refer to Note 14 for more information regarding these asset impairment charges. |
(4) | Restructuring charges incurred during the nine months ended October 29, 2016 related to plans to better align the Company’s global cost and organizational structure with its current strategic initiatives. Refer to Note 6 for more information regarding these restructuring charges. |
(9) | Borrowings and Capital Lease Obligations |
Oct 28, 2017 | Jan 28, 2017 | ||||||
Mortgage debt, maturing monthly through January 2026 | $ | 20,465 | $ | 20,889 | |||
Capital lease obligations | 17,325 | — | |||||
Other | 3,112 | 3,159 | |||||
40,902 | 24,048 | ||||||
Less current installments | 2,121 | 566 | |||||
Long-term debt and capital lease obligations | $ | 38,781 | $ | 23,482 |
(10) | Share-Based Compensation |
Three Months Ended | Nine Months Ended | ||||||||||||||
Oct 28, 2017 | Oct 29, 2016 | Oct 28, 2017 | Oct 29, 2016 | ||||||||||||
Stock options | $ | 571 | $ | 520 | $ | 1,761 | $ | 1,654 | |||||||
Stock awards/units | 3,658 | 3,176 | 10,539 | 11,000 | |||||||||||
Employee Stock Purchase Plan | 31 | 23 | 110 | 114 | |||||||||||
Total share-based compensation expense | $ | 4,260 | $ | 3,719 | $ | 12,410 | $ | 12,768 |
Number of Units | Weighted Average Grant Date Fair Value | |||||
Nonvested at January 28, 2017 | 787,849 | $ | 19.17 | |||
Granted | 818,416 | 11.17 | ||||
Vested | (193,240 | ) | 20.57 | |||
Forfeited | (6,757 | ) | 18.35 | |||
Nonvested at October 28, 2017 | 1,406,268 | $ | 14.32 |
Number of Units | Weighted Average Grant Date Fair Value | |||||
Nonvested at January 28, 2017 | 323,825 | $ | 16.63 | |||
Granted | 248,020 | 10.62 | ||||
Vested | — | — | ||||
Forfeited | — | — | ||||
Nonvested at October 28, 2017 | 571,845 | $ | 14.02 |
(11) | Related Party Transactions |
(12) | Commitments and Contingencies |
(13) | Defined Benefit Plans |
Three Months Ended October 28, 2017 | |||||||||||
SERP | Swiss Pension Plan | Total | |||||||||
Service cost | $ | — | $ | 492 | $ | 492 | |||||
Interest cost | 461 | 22 | 483 | ||||||||
Expected return on plan assets | — | (48 | ) | (48 | ) | ||||||
Net amortization of unrecognized prior service credit | — | (7 | ) | (7 | ) | ||||||
Net amortization of actuarial losses | 38 | 78 | 116 | ||||||||
Net periodic defined benefit pension cost | $ | 499 | $ | 537 | $ | 1,036 |
Nine Months Ended October 28, 2017 | |||||||||||
SERP | Swiss Pension Plan | Total | |||||||||
Service cost | $ | — | $ | 1,452 | $ | 1,452 | |||||
Interest cost | 1,382 | 64 | 1,446 | ||||||||
Expected return on plan assets | — | (143 | ) | (143 | ) | ||||||
Net amortization of unrecognized prior service credit | — | (20 | ) | (20 | ) | ||||||
Net amortization of actuarial losses | 114 | 230 | 344 | ||||||||
Net periodic defined benefit pension cost | $ | 1,496 | $ | 1,583 | $ | 3,079 |
Three Months Ended October 29, 2016 | |||||||||||
SERP | Swiss Pension Plan | Total | |||||||||
Service cost | $ | — | $ | 381 | $ | 381 | |||||
Interest cost | 460 | 22 | 482 | ||||||||
Expected return on plan assets | — | (46 | ) | (46 | ) | ||||||
Net amortization of unrecognized prior service credit | — | (7 | ) | (7 | ) | ||||||
Net amortization of actuarial losses | 39 | 47 | 86 | ||||||||
Net periodic defined benefit pension cost | $ | 499 | $ | 397 | $ | 896 |
Nine Months Ended October 29, 2016 | |||||||||||
SERP | Swiss Pension Plan | Total | |||||||||
Service cost | $ | — | $ | 1,152 | $ | 1,152 | |||||
Interest cost | 1,380 | 66 | 1,446 | ||||||||
Expected return on plan assets | — | (139 | ) | (139 | ) | ||||||
Net amortization of unrecognized prior service credit | — | (21 | ) | (21 | ) | ||||||
Net amortization of actuarial losses | 116 | 141 | 257 | ||||||||
Net periodic defined benefit pension cost | $ | 1,496 | $ | 1,199 | $ | 2,695 |
(14) | Fair Value Measurements |
Fair Value Measurements at Oct 28, 2017 | Fair Value Measurements at Jan 28, 2017 | |||||||||||||||||||||||||||||||
Recurring Fair Value Measures | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Foreign exchange currency contracts | $ | — | $ | 1,820 | $ | — | $ | 1,820 | $ | — | $ | 9,868 | $ | — | $ | 9,868 | ||||||||||||||||
Interest rate swap | — | 812 | — | 812 | — | 876 | — | 876 | ||||||||||||||||||||||||
Total | $ | — | $ | 2,632 | $ | — | $ | 2,632 | $ | — | $ | 10,744 | $ | — | $ | 10,744 | ||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Foreign exchange currency contracts | $ | — | $ | 6,594 | $ | — | $ | 6,594 | $ | — | $ | 1,424 | $ | — | $ | 1,424 | ||||||||||||||||
Deferred compensation obligations | — | 12,729 | — | 12,729 | — | 11,184 | — | 11,184 | ||||||||||||||||||||||||
Total | $ | — | $ | 19,323 | $ | — | $ | 19,323 | $ | — | $ | 12,608 | $ | — | $ | 12,608 |
(15) | Derivative Financial Instruments |
Derivative Balance Sheet Location | Fair Value at Oct 28, 2017 | Fair Value at Jan 28, 2017 | ||||||||
ASSETS: | ||||||||||
Derivatives designated as hedging instruments: | ||||||||||
Cash flow hedges: | ||||||||||
Foreign exchange currency contracts | Other current assets/ Other assets | $ | 1,042 | $ | 6,072 | |||||
Interest rate swap | Other assets | 812 | 876 | |||||||
Total derivatives designated as hedging instruments | 1,854 | 6,948 | ||||||||
Derivatives not designated as hedging instruments: | ||||||||||
Foreign exchange currency contracts | Other current assets/ Other assets | 778 | 3,796 | |||||||
Total | $ | 2,632 | $ | 10,744 | ||||||
LIABILITIES: | ||||||||||
Derivatives designated as hedging instruments: | ||||||||||
Cash flow hedges: | ||||||||||
Foreign exchange currency contracts | Accrued expenses/ Other long-term liabilities | $ | 4,744 | $ | 1,250 | |||||
Derivatives not designated as hedging instruments: | ||||||||||
Foreign exchange currency contracts | Accrued expenses | 1,850 | 174 | |||||||
Total | $ | 6,594 | $ | 1,424 |
Gain Recognized in OCI | Location of Gain (Loss) Reclassified from Accumulated OCI into Earnings (Loss) (1) | Gain (Loss) Reclassified from Accumulated OCI into Earnings (Loss) | |||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||
Oct 28, 2017 | Oct 29, 2016 | Oct 28, 2017 | Oct 29, 2016 | ||||||||||||||
Derivatives designated as cash flow hedges: | |||||||||||||||||
Foreign exchange currency contracts | $ | 3,215 | $ | 3,421 | Cost of product sales | $ | 81 | $ | 739 | ||||||||
Foreign exchange currency contracts | $ | 38 | $ | 260 | Other income/expense | $ | (337 | ) | $ | 45 | |||||||
Interest rate swap | $ | 134 | $ | 500 | Interest expense | $ | (57 | ) | $ | (57 | ) |
Loss Recognized in OCI | Location of Gain (Loss) Reclassified from Accumulated OCI into Earnings (Loss) (1) | Gain (Loss) Reclassified from Accumulated OCI into Earnings (Loss) | |||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||
Oct 28, 2017 | Oct 29, 2016 | Oct 28, 2017 | Oct 29, 2016 | ||||||||||||||
Derivatives designated as cash flow hedges: | |||||||||||||||||
Foreign exchange currency contracts | $ | (10,601 | ) | $ | (2,229 | ) | Cost of product sales | $ | 1,360 | $ | 3,315 | ||||||
Foreign exchange currency contracts | $ | (958 | ) | $ | (96 | ) | Other income/expense | $ | (244 | ) | $ | 126 | |||||
Interest rate swap | $ | (143 | ) | $ | (317 | ) | Interest expense | $ | (119 | ) | $ | (167 | ) |
(1) | The Company recognized gains of $0.5 million and $2.0 million resulting from the ineffective portion related to foreign exchange currency contracts in interest income during the three and nine months ended October 28, 2017, respectively. The Company recognized gains of $0.3 million and $0.8 million resulting from the ineffective portion related to foreign exchange currency contracts in interest income during the three and nine months ended October 29, 2016, respectively. There was no ineffectiveness recognized related to the interest rate swap during the three and nine months ended October 28, 2017 and October 29, 2016. |
Three Months Ended | Nine Months Ended | ||||||||||||||
Oct 28, 2017 | Oct 29, 2016 | Oct 28, 2017 | Oct 29, 2016 | ||||||||||||
Beginning balance gain (loss) | $ | (8,751 | ) | $ | (37 | ) | $ | 5,400 | $ | 7,252 | |||||
Net gains (losses) from changes in cash flow hedges | 2,749 | 3,305 | (10,220 | ) | (1,958 | ) | |||||||||
Net (gains) losses reclassified to earnings (loss) | 235 | (593 | ) | (947 | ) | (2,619 | ) | ||||||||
Ending balance gain (loss) | $ | (5,767 | ) | $ | 2,675 | $ | (5,767 | ) | $ | 2,675 |
Location of Gain (Loss) Recognized in Earnings (Loss) | Gain Recognized in Earnings (Loss) | Gain (Loss) Recognized in Earnings (Loss) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
Oct 28, 2017 | Oct 29, 2016 | Oct 28, 2017 | Oct 29, 2016 | |||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||
Foreign exchange currency contracts | Other income/expense | $ | 1,645 | $ | 2,440 | $ | (5,688 | ) | $ | (704 | ) | |||||||
Interest rate swap | Other income/expense | $ | — | $ | — | $ | — | $ | 38 |
(16) | Subsequent Events |
ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
• | Total net revenue increased 3.3% to $554.1 million for the quarter ended October 28, 2017, compared to $536.3 million in the same prior-year period. In constant currency, net revenue increased by 0.6%. |
• | Gross margin (gross profit as a percentage of total net revenue) increased 90 basis points to 34.5% for the quarter ended October 28, 2017, compared to 33.6% in the same prior-year period. |
• | Selling, general and administrative (“SG&A”) expenses as a percentage of total net revenue (“SG&A rate”) increased 160 basis points to 32.2% for the quarter ended October 28, 2017, compared to 30.6% in the same prior-year period. SG&A expenses increased 8.7% to $178.6 million for the quarter ended October 28, 2017, compared to $164.3 million in the same prior-year period. |
• | During the quarter ending October 28, 2017, the Company recognized net losses on lease terminations of $11.5 million. |
• | During the quarter ended October 28, 2017, the Company recognized asset impairment charges of $2.0 million, compared to $0.8 million in the same prior-year period. |
• | Operating margin decreased 300 basis points to negative 0.2% for the quarter ended October 28, 2017, from 2.8% in the same prior-year period. Net losses on lease terminations negatively impacted operating margin by 210 basis points and higher asset impairment charges negatively impacted operating margin by 20 basis points during the quarter ended October 28, 2017 compared to the same prior-year period. Loss from operations was $1.0 million for the quarter ended October 28, 2017, compared to earnings from operations of $15.1 million in the same prior-year period. |
• | Other income, net (including interest income and expense) totaled $3.0 million for the quarter ended October 28, 2017, compared to $0.5 million in the same prior-year period. |
• | The effective income tax rate increased by 144.9% to 182.6% for the quarter ended October 28, 2017, compared to 37.7% in the same prior-year period. |
• | The Company had $233.1 million in cash and cash equivalents and $0.2 million in restricted cash as of October 28, 2017, compared to $349.1 million in cash and cash equivalents and $0.8 million in restricted cash at October 29, 2016. |
◦ | The Company invested $24.8 million to repurchase 1,919,967 of its common shares during the nine months ended October 28, 2017. |
◦ | During the third quarter of fiscal 2018, the Company made up-front payments of approximately $22 million related to the modification of certain lease agreements held with a common landlord in North America. |
• | Accounts receivable, which consists of trade receivables relating primarily to the Company’s wholesale business in Europe and, to a lesser extent, to its wholesale businesses in the Americas and Asia, royalty receivables relating to its licensing operations, credit card and retail concession receivables related to its retail businesses and certain other receivables, increased by $18.5 million, or 8.5%, to $236.7 million as of October 28, 2017, compared to $218.2 million at October 29, 2016. On a constant currency basis, accounts receivable increased by $10.1 million, or 4.6%, when compared to October 29, 2016. |
• | Inventory increased by $49.1 million, or 11.5%, to $477.2 million as of October 28, 2017, compared to $428.1 million at October 29, 2016. On a constant currency basis, inventory increased by $34.7 million, or 8.1%, when compared to October 29, 2016. |
• | During the nine months ended October 28, 2017, the Company entered into capital lease obligations totaling $18.0 million related primarily to equipment used in its new European third party distribution center. |
Region | Total Stores | Directly Operated Stores | Licensee Stores | ||||||
United States | 317 | 315 | 2 | ||||||
Canada | 96 | 96 | — | ||||||
Central and South America | 97 | 54 | 43 | ||||||
Total Americas | 510 | 465 | 45 | ||||||
Europe and the Middle East | 661 | 385 | 276 | ||||||
Asia and the Pacific | 482 | 132 | 350 | ||||||
Total | 1,653 | 982 | 671 |
Three Months Ended | ||||||||||||||
Oct 28, 2017 | Oct 29, 2016 | Change | % Change | |||||||||||
Net revenue: | ||||||||||||||
Americas Retail | $ | 187,021 | $ | 215,862 | $ | (28,841 | ) | (13.4 | %) | |||||
Europe (1) | 221,230 | 186,289 | 34,941 | 18.8 | ||||||||||
Asia (1) | 74,322 | 63,617 | 10,705 | 16.8 | ||||||||||
Americas Wholesale (1) | 45,636 | 46,785 | (1,149 | ) | (2.5 | ) | ||||||||
Licensing | 25,929 | 23,768 | 2,161 | 9.1 | ||||||||||
Total net revenue | $ | 554,138 | $ | 536,321 | $ | 17,817 | 3.3 | % | ||||||
Earnings (loss) from operations: | ||||||||||||||
Americas Retail (1) | $ | (4,670 | ) | $ | (10,505 | ) | $ | 5,835 | 55.5 | % | ||||
Europe (1) | 6,678 | 11,597 | (4,919 | ) | (42.4 | ) | ||||||||
Asia (1) | 2,718 | (1,962 | ) | 4,680 | 238.5 | |||||||||
Americas Wholesale (1) | 8,241 | 8,142 | 99 | 1.2 | ||||||||||
Licensing (1) | 23,532 | 20,119 | 3,413 | 17.0 | ||||||||||
Total segment earnings from operations | 36,499 | 27,391 | 9,108 | 33.3 | ||||||||||
Corporate overhead (1) | (23,942 | ) | (11,466 | ) | (12,476 | ) | 108.8 | |||||||
Net gains (losses) on lease terminations (1) | (11,494 | ) | — | (11,494 | ) | |||||||||
Asset impairments (1) | (2,018 | ) | (802 | ) | (1,216 | ) | ||||||||
Total earnings (loss) from operations | $ | (955 | ) | $ | 15,123 | $ | (16,078 | ) | (106.3 | %) | ||||
Operating margins: | ||||||||||||||
Americas Retail (1) | (2.5 | %) | (4.9 | %) | ||||||||||
Europe (1) | 3.0 | % | 6.2 | % | ||||||||||
Asia (1) | 3.7 | % | (3.1 | %) | ||||||||||
Americas Wholesale (1) | 18.1 | % | 17.4 | % | ||||||||||
Licensing (1) | 90.8 | % | 84.6 | % | ||||||||||
Total Company | (0.2 | %) | 2.8 | % |
(1) | During the first quarter of fiscal 2018, net revenue and related costs and expenses for certain globally serviced customers were reclassified into the segment primarily responsible for the relationship. During the third quarter of fiscal 2018, segment results were also adjusted to exclude corporate performance-based compensation costs, net gains (losses) on lease terminations and asset impairment charges due to the fact that these items are no longer included in the segment results provided to the Company’s chief operating decision maker in order to allocate resources and assess performance. Accordingly, segment results have been adjusted for the three months ended October 29, 2016 to conform to the current period presentation. |
Nine Months Ended | ||||||||||||||
Oct 28, 2017 | Oct 29, 2016 | Change | % Change | |||||||||||
Net revenue: | ||||||||||||||
Americas Retail | $ | 561,903 | $ | 646,573 | $ | (84,670 | ) | (13.1 | %) | |||||
Europe (1) | 641,833 | 532,847 | 108,986 | 20.5 | ||||||||||
Asia (1) | 200,436 | 171,255 | 29,181 | 17.0 | ||||||||||
Americas Wholesale (1) | 114,151 | 111,354 | 2,797 | 2.5 | ||||||||||
Licensing | 68,088 | 68,066 | 22 | 0.0 | ||||||||||
Total net revenue | $ | 1,586,411 | $ | 1,530,095 | $ | 56,316 | 3.7 | % | ||||||
Earnings (loss) from operations: | ||||||||||||||
Americas Retail (1) | $ | (33,654 | ) | $ | (22,279 | ) | $ | (11,375 | ) | (51.1 | %) | |||
Europe (1) | 30,749 | 16,221 | 14,528 | 89.6 | ||||||||||
Asia (1) | 5,055 | (5,251 | ) | 10,306 | 196.3 | |||||||||
Americas Wholesale (1) | 20,011 | 18,211 | 1,800 | 9.9 | ||||||||||
Licensing (1) | 61,019 | 60,325 | 694 | 1.2 | ||||||||||
Total segment earnings from operations | 83,180 | 67,227 | 15,953 | 23.7 | ||||||||||
Corporate overhead (1) | (68,899 | ) | (58,660 | ) | (10,239 | ) | 17.5 | |||||||
Net gains (losses) on lease terminations (1) | (11,494 | ) | 695 | (12,189 | ) | |||||||||
Asset impairments (1) | (6,013 | ) | (1,457 | ) | (4,556 | ) | ||||||||
Restructuring charges | — | (6,083 | ) | 6,083 | ||||||||||
Total earnings (loss) from operations | $ | (3,226 | ) | $ | 1,722 | $ | (4,948 | ) | 287.3 | % | ||||
Operating margins: | ||||||||||||||
Americas Retail (1) | (6.0 | %) | (3.4 | %) | ||||||||||
Europe (1) | 4.8 | % | 3.0 | % | ||||||||||
Asia (1) | 2.5 | % | (3.1 | %) | ||||||||||
Americas Wholesale (1) | 17.5 | % | 16.4 | % | ||||||||||
Licensing (1) | 89.6 | % | 88.6 | % | ||||||||||
Total Company | (0.2 | %) | 0.1 | % |
(1) | During the first quarter of fiscal 2018, net revenue and related costs and expenses for certain globally serviced customers were reclassified into the segment primarily responsible for the relationship. During the third quarter of fiscal 2018, segment results were also adjusted to exclude corporate performance-based compensation costs, net gains (losses) on lease terminations and asset impairment charges due to the fact that these items are no longer included in the segment results provided to the Company’s chief operating decision maker in order to allocate resources and assess performance. Accordingly, segment results have been adjusted for the nine months ended October 28, 2017 and October 29, 2016 to conform to the current period presentation. |
ITEM 3. | Quantitative and Qualitative Disclosures About Market Risk. |
ITEM 1. | Legal Proceedings. |
ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs | |||||||||
July 30, 2017 to August 26, 2017 | |||||||||||||
Repurchase program (1) | — | — | — | $ | 430,468,702 | ||||||||
Employee transactions (2) | 2,232 | $ | 13.73 | — | |||||||||
August 27, 2017 to September 30, 2017 | |||||||||||||
Repurchase program (1) | — | — | — | $ | 430,468,702 | ||||||||
Employee transactions (2) | 610 | $ | 15.99 | — | |||||||||
October 1, 2017 to October 28, 2017 | |||||||||||||
Repurchase program (1) | 434,772 | $ | 16.04 | 434,772 | $ | 423,494,687 | |||||||
Employee transactions (2) | 466 | $ | 16.86 | — | |||||||||
Total | |||||||||||||
Repurchase program (1) | 434,772 | $ | 16.04 | 434,772 | |||||||||
Employee transactions (2) | 3,308 | $ | 14.59 | — |
(1) | On June 26, 2012, the Company’s Board of Directors authorized a program to repurchase, from time-to-time and as market and business conditions warrant, up to $500 million of the Company’s common stock. Repurchases under the program may be made on the open market or in privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means. There is no minimum or maximum number of shares to be repurchased under the program, which may be discontinued at any time, without prior notice. |
(2) | Consists of shares surrendered to, or withheld by, the Company in satisfaction of employee tax withholding obligations that occur upon vesting of restricted stock awards/units granted under the Company’s 2004 Equity Incentive Plan, as amended. |
ITEM 6. | Exhibits. |
Exhibit Number | Description | |
3.1. | ||
3.2. | ||
4.1. | ||
†31.1. | ||
†31.2. | ||
†32.1. | ||
†32.2. | ||
†101.INS | XBRL Instance Document | |
†101.SCH | XBRL Taxonomy Extension Schema Document | |
†101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
†101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
†101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
†101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
* | Management Contract or Compensatory Plan |
† | Filed herewith |
Guess?, Inc. | |||
Date: | December 1, 2017 | By: | /s/ VICTOR HERRERO |
Victor Herrero | |||
Chief Executive Officer | |||
Date: | December 1, 2017 | By: | /s/ SANDEEP REDDY |
Sandeep Reddy | |||
Chief Financial Officer | |||
(Principal Financial Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Guess?, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | December 1, 2017 | By: | /s/ VICTOR HERRERO |
Victor Herrero Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Guess?, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | December 1, 2017 | By: | /s/ SANDEEP REDDY |
Sandeep Reddy Chief Financial Officer |
• | the Quarterly Report on Form 10-Q of the Company for the period ended October 28, 2017, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
• | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | December 1, 2017 | By: | /s/ VICTOR HERRERO |
Victor Herrero Chief Executive Officer |
• | the Quarterly Report on Form 10-Q of the Company for the period ended October 28, 2017, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
• | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | December 1, 2017 | By: | /s/ SANDEEP REDDY |
Sandeep Reddy Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
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Oct. 28, 2017 |
Nov. 28, 2017 |
|
Document and Entity Information | ||
Entity Registrant Name | GUESS INC | |
Trading Symbol | GES | |
Entity Central Index Key | 0000912463 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 28, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --02-03 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 82,274,105 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Oct. 28, 2017 |
Jan. 28, 2017 |
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Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 141,161,026 | 140,509,974 |
Common stock, shares outstanding | 82,843,115 | 84,069,492 |
Treasury stock, shares | 58,317,911 | 56,440,482 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Oct. 28, 2017 |
Oct. 29, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
|
Income Statement [Abstract] | ||||
Product sales | $ 528,209 | $ 512,553 | $ 1,518,323 | $ 1,462,029 |
Net royalties | 25,929 | 23,768 | 68,088 | 68,066 |
Net revenue | 554,138 | 536,321 | 1,586,411 | 1,530,095 |
Cost of product sales | 363,029 | 356,079 | 1,052,633 | 1,021,462 |
Gross profit | 191,109 | 180,242 | 533,778 | 508,633 |
Selling, general and administrative expenses | 178,552 | 164,317 | 519,497 | 500,066 |
Net (gains) losses on lease terminations | 11,494 | 0 | 11,494 | (695) |
Asset impairment charges | 2,018 | 802 | 6,013 | 1,457 |
Restructuring charges | 0 | 0 | 0 | 6,083 |
Earnings (loss) from operations | (955) | 15,123 | (3,226) | 1,722 |
Other income (expense): | ||||
Interest expense | (684) | (500) | (1,642) | (1,478) |
Interest income | 891 | 861 | 3,022 | 1,763 |
Other income, net | 2,759 | 125 | 3,561 | 26,417 |
Total other income | 2,966 | 486 | 4,941 | 26,702 |
Earnings before income tax expense | 2,011 | 15,609 | 1,715 | 28,424 |
Income tax expense | 3,673 | 5,880 | 8,723 | 11,682 |
Net earnings (loss) | (1,662) | 9,729 | (7,008) | 16,742 |
Net earnings attributable to noncontrolling interests | 1,198 | 626 | 1,926 | 548 |
Net earnings (loss) attributable to Guess, Inc. | $ (2,860) | $ 9,103 | $ (8,934) | $ 16,194 |
Net earnings (loss) per common share attributable to common stockholders (Note 2): | ||||
Basic (in dollars per share) | $ (0.04) | $ 0.11 | $ (0.12) | $ 0.19 |
Diluted (in dollars per share) | $ (0.04) | $ 0.11 | $ (0.12) | $ 0.19 |
Weighted average common shares outstanding attributable to common stockholders (Note 2): | ||||
Basic (in shares) | 82,390 | 83,758 | 82,599 | 83,631 |
Diluted (in shares) | 82,390 | 83,917 | 82,599 | 83,813 |
Dividends declared per common share (in dollars per share) | $ 0.225 | $ 0.225 | $ 0.675 | $ 0.675 |
Basis of Presentation |
9 Months Ended |
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Oct. 28, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation In the opinion of management, the accompanying unaudited condensed consolidated financial statements of Guess?, Inc. and its subsidiaries (the “Company”) contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the condensed consolidated balance sheets as of October 28, 2017 and January 28, 2017, the condensed consolidated statements of income (loss) and comprehensive income (loss) for the three and nine months ended October 28, 2017 and October 29, 2016 and the condensed consolidated statements of cash flows for the nine months ended October 28, 2017 and October 29, 2016. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they have been condensed and do not include all of the information and footnotes required by GAAP for complete financial statements. The results of operations for the three and nine months ended October 28, 2017 are not necessarily indicative of the results of operations to be expected for the full fiscal year. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended January 28, 2017. The three and nine months ended October 28, 2017 had the same number of days as the three and nine months ended October 29, 2016. All references herein to “fiscal 2018,” “fiscal 2017” and “fiscal 2016” represent the results of the 53-week fiscal year ending February 3, 2018 and the 52-week fiscal years ended January 28, 2017 and January 31, 2016, respectively. Reclassifications The Company has made certain reclassifications to current year-to-date and prior year amounts to conform to the current period presentation within the accompanying notes to the condensed consolidated financial statements. Net Gains (Losses) on Lease Terminations During the third quarter of fiscal 2018, the Company recorded net losses on lease terminations related primarily to the modification of certain lease agreements held with a common landlord in North America. In connection with this modification, the Company made up-front payments of approximately $22 million, of which $12 million was recognized as net losses on lease terminations and $10 million was recorded as advance rent payments. During the third quarter of fiscal 2018, the Company also recorded net gains on lease terminations of approximately $1 million related primarily to the early termination of certain lease agreements in Europe. During the nine months ended October 29, 2016, the Company recorded net gains on lease terminations of $0.7 million related primarily to the early termination of certain lease agreements in Europe. The net gains on lease terminations were recorded during the first and second quarters of fiscal 2017. Sale of Other Assets During the nine months ended October 29, 2016, the Company sold its minority interest equity holding in a privately-held boutique apparel company for net proceeds of approximately $34.8 million, which resulted in a gain of approximately $22.3 million which was recorded in other income. The gain was recorded in other income during the three months ended July 30, 2016. New Accounting Guidance Changes in Accounting Policies In July 2015, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance to simplify the subsequent measurement of inventories by replacing the lower of cost or market test with a lower of cost or net realizable value test. The Company adopted this guidance effective January 29, 2017 on a prospective basis. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures. In March 2016, the FASB issued authoritative guidance to simplify the accounting for certain aspects of share-based compensation. This guidance addresses the accounting for income tax effects at award settlement, the use of an expected forfeiture rate to estimate award cancellations prior to the vesting date and the presentation of excess tax benefits and shares surrendered for tax withholdings on the statement of cash flows. The Company adopted this guidance effective January 29, 2017. This guidance requires all income tax effects of awards (resulting from an increase or decrease in the fair value of an award from grant date to the vesting date) to be recognized in the income statement when the awards vest or are settled. This is a change from previous guidance that required such activity to be recorded in paid-in capital within stockholders’ equity. The Company adopted this provision prospectively and accordingly recorded tax shortfalls of approximately $0.7 million as an increase to the Company’s income tax expense in its condensed consolidated statement of income (loss) during the nine months ended October 28, 2017. This resulted in a negative impact on net loss attributable to Guess?, Inc. of approximately $0.7 million, or an unfavorable $0.01 per share impact during the nine months ended October 28, 2017. The Company recorded minimal tax shortfalls related to the adoption of this guidance during the three months ended October 28, 2017. Under this guidance, excess tax benefits are also excluded from the assumed proceeds available to repurchase shares in the computation of diluted earnings (loss) per share. This was adopted prospectively and did not have an impact on the Company’s diluted loss per share for the three or nine months ended October 28, 2017. This guidance also eliminates the requirement to estimate forfeitures, but rather provides for an election that would allow entities to account for forfeitures as they occur. The Company adopted this election beginning in the first quarter of fiscal 2018 using the modified retrospective method and recorded a cumulative adjustment to reduce retained earnings by approximately $0.3 million. This guidance also changes the presentation of excess tax benefits from a financing activity to an operating activity in the statement of cash flows. This presentation was adopted on a retrospective basis and, as a result, net cash used in operating activities improved by $0.2 million with a corresponding offset to net cash used in financing activities during the nine months ended October 29, 2016. In August 2016, the FASB issued authoritative guidance related to the classification of certain cash receipts and cash payments in the statement of cash flows. The Company adopted this guidance effective January 29, 2017 on a retrospective basis. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures. In October 2016, the FASB issued authoritative guidance that requires an entity to include indirect interests held through related parties that are under common control on a proportionate basis when evaluating if a reporting entity is the primary beneficiary of a variable interest entity. The Company adopted this guidance effective January 29, 2017. The adoption of this guidance did not have an impact on the Company’s condensed consolidated financial statements or related disclosures. In November 2016, the FASB issued authoritative guidance related to the presentation of restricted cash in the statement of cash flows. This guidance requires that the statement of cash flows reconcile the change during the period in total cash, cash equivalents and restricted cash. The Company’s restricted cash is generally held as collateral for certain transactions. The Company adopted this guidance effective January 29, 2017 on a retrospective basis. As a result, the Company updated its condensed consolidated statements of cash flows for the nine months ended October 28, 2017 and October 29, 2016 to include restricted cash with cash and cash equivalents when reconciling the beginning and end of period balances and to eliminate changes in restricted cash that have historically been included within operating and investing activities. In January 2017, the FASB issued authoritative guidance which clarifies the definition of a business to assist entities when evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The Company early adopted this guidance effective January 29, 2017 on a prospective basis. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures. Recently Issued Accounting Guidance In May 2014, the FASB issued a comprehensive new revenue recognition standard which will supersede previous existing revenue recognition guidance. The standard is intended to clarify the principles of recognizing revenue and create common revenue recognition guidance between GAAP and International Financial Reporting Standards. The standard also requires expanded disclosures surrounding revenue recognition. During fiscal 2017, the FASB issued additional clarification guidance on the new revenue recognition standard which also included certain scope improvements and practical expedients. The standard (including clarification guidance issued) is effective for fiscal periods beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, and allows for either full retrospective or modified retrospective adoption, with early adoption permitted. The Company plans to adopt this guidance using the modified retrospective method beginning in the first quarter of fiscal 2019. The Company’s assessment efforts to date have included reviewing current revenue processes, arrangements and accounting policies to identify potential differences that could arise from the application of this standard on its consolidated financial statements and related disclosures. The Company expects the differences to relate primarily to the classification and timing of when revenue and certain expenses are recognized from its licensing business, loyalty programs and gift card breakage. The Company also expects revenue related to its e-commerce operations to be recognized when merchandise is transferred to a common carrier rather than upon receipt by the customer. The Company is continuing to evaluate the financial impact of the adoption of this standard on its consolidated financial statements and related disclosures. In January 2016, the FASB issued authoritative guidance which requires equity investments not accounted for under the equity method of accounting or consolidation accounting to be measured at fair value, with subsequent changes in fair value recognized in net income. This guidance also addresses other recognition, measurement, presentation and disclosure requirements for financial instruments. This guidance is effective for fiscal years beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, and requires a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures unless the Company acquires new equity investments. In February 2016, the FASB issued a comprehensive new lease standard which will supersede previous lease guidance. The standard requires a lessee to recognize assets and liabilities related to long-term leases that were classified as operating leases under previous guidance in its balance sheet. An asset would be recognized related to the right to use the underlying asset and a liability would be recognized related to the obligation to make lease payments over the term of the lease. The standard also requires expanded disclosures surrounding leases. The standard is effective for fiscal periods beginning after December 15, 2018, which will be the Company’s first quarter of fiscal 2020, and requires modified retrospective adoption, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and related disclosures, but expects there will be a material increase in its long-term assets and liabilities resulting from the adoption. In June 2016, the FASB issued authoritative guidance related to the measurement of credit losses on financial instruments. This guidance is effective for fiscal years beginning after December 15, 2019, which will be the Company’s first quarter of fiscal 2021. Early adoption is permitted for fiscal periods beginning after December 15, 2018, which will be the Company’s first quarter of fiscal 2020. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and related disclosures. In October 2016, the FASB issued authoritative guidance which amends the accounting for income taxes on intra-entity transfers of assets other than inventory. This guidance requires that entities recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. The income tax consequences on intra-entity transfers of inventory will continue to be deferred until the inventory has been sold to a third party. This guidance is effective for fiscal years beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, and requires a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Early adoption is permitted at the beginning of a fiscal year. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures. In January 2017, the FASB issued authoritative guidance to simplify the testing for goodwill impairment by removing step two from the goodwill testing. Under current guidance, if the fair value of a reporting unit is lower than its carrying amount (step one), an entity would calculate an impairment charge by comparing the implied fair value of goodwill with its carrying amount (step two). The implied fair value of goodwill was calculated by deducting the fair value of the assets and liabilities of the respective reporting unit from the reporting unit’s fair value as determined under step one. This guidance instead provides that an impairment charge should be recognized based on the difference between a reporting unit’s fair value and its carrying value. This guidance also does not require a qualitative test to be performed on reporting units with zero or negative carrying amounts. However, entities need to disclose any reporting units with zero or negative carrying amounts that have goodwill and the amount of goodwill allocated to each. This guidance is effective for fiscal years beginning after December 15, 2019, which will be the Company’s first quarter of fiscal 2021, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures. In March 2017, the FASB issued authoritative guidance related to the presentation of net periodic pension cost in the income statement. This guidance requires that the service cost component of net periodic pension cost is presented in the same line as other compensation costs arising from services rendered by the employees during the period. The other non-service components of net periodic pension cost are required to be presented in the income statement separately from the service cost component and outside of earnings from operations. This guidance also allows for the service cost component to be eligible for capitalization when applicable. This guidance is effective for fiscal years beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, and requires retrospective adoption for the presentation of the service cost component and other non-service components of net periodic pension cost in the income statement and prospective adoption for capitalization of the service cost component. Early adoption is permitted at the beginning of a fiscal year. Other than the change in presentation of other non-service components of net periodic pension cost within the Company’s consolidated statements of income, the adoption of this guidance is not expected to have an impact on the Company’s consolidated financial statements and related disclosures. In May 2017, the FASB issued authoritative guidance that provides clarification on accounting for modifications in share-based payment awards. This guidance is effective for fiscal years beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, with early adoption permitted. The adoption of this guidance is not expected to have an impact on the Company’s consolidated financial statements or related disclosures unless there are modifications to the Company’s share-based payment awards. In August 2017, the FASB issued authoritative guidance to better align the results of hedge accounting with an entity’s risk management activities. This guidance updates the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. This guidance is effective for fiscal years beginning after December 15, 2018, which will be the Company’s first quarter of fiscal 2020, and requires a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption, with early adoption permitted. The updated presentation and disclosure guidance is required only on a prospective basis. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and related disclosures. |
Earnings (Loss) Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share represents net earnings (loss) attributable to common stockholders divided by the weighted average number of common shares outstanding during the period. The Company considers any restricted stock units with forfeitable dividend rights that are issued and outstanding, but considered contingently returnable if certain service conditions are not met, as common equivalent shares outstanding. These restricted stock units are excluded from the weighted average number of common shares outstanding and basic earnings (loss) per share calculation until the respective service conditions have been met. Diluted earnings per share represents net earnings attributable to common stockholders divided by the weighted average number of common shares outstanding, inclusive of the dilutive impact of common equivalent shares outstanding during the period. The potentially dilutive impact of common equivalent shares outstanding are not included in the computation of diluted net loss per share as the impact of the shares would be antidilutive due to the net loss incurred for the period. Nonvested restricted stock awards (referred to as participating securities) are excluded from the dilutive impact of common equivalent shares outstanding in accordance with authoritative guidance under the two-class method since the nonvested restricted stockholders are entitled to participate in dividends declared on common stock as if the shares were fully vested and hence are deemed to be participating securities. Under the two-class method, distributed and undistributed earnings attributable to nonvested restricted stockholders are excluded from net earnings (loss) attributable to common stockholders for purposes of calculating basic and diluted earnings (loss) per common share. However, net losses are not allocated to nonvested restricted stockholders because they are not contractually obligated to share in the losses of the Company. In addition, the Company has granted certain nonvested stock units that are subject to certain performance-based or market-based vesting conditions as well as continued service requirements through the respective vesting periods. These nonvested stock units are included in the computation of diluted net earnings per common share attributable to common stockholders only to the extent that the underlying performance-based or market-based vesting conditions are satisfied as of the end of the reporting period, or would be considered satisfied if the end of the reporting period were the end of the related contingency period, and the results would be dilutive under the treasury stock method. The computation of basic and diluted net earnings (loss) per common share attributable to common stockholders is as follows (in thousands, except per share data):
For the three months ended October 28, 2017 and October 29, 2016, equity awards granted for 2,901,025 and 3,463,100, respectively, of the Company’s common shares and for the nine months ended October 28, 2017 and October 29, 2016, equity awards granted for 3,104,027 and 3,239,163, respectively, of the Company’s common shares were outstanding but were excluded from the computation of diluted weighted average common shares and common equivalent shares outstanding because the assumed proceeds, as calculated under the treasury stock method, resulted in these awards being antidilutive. For the three and nine months ended October 28, 2017, the Company also excluded 1,145,080 nonvested stock units which are subject to the achievement of performance-based conditions from the computation of diluted weighted average common shares and common equivalent shares outstanding because these conditions were not achieved as of October 28, 2017. For the three and nine months ended October 29, 2016, the Company excluded 602,816 nonvested stock units which were subject to the achievement of performance-based or market-based vesting conditions from the computation of diluted weighted average common shares and common equivalent shares outstanding because these conditions were not achieved as of October 29, 2016. Share Repurchase Program On June 26, 2012, the Company’s Board of Directors authorized a program to repurchase, from time-to-time and as market and business conditions warrant, up to $500 million of the Company’s common stock. Repurchases under the program may be made on the open market or in privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means. There is no minimum or maximum number of shares to be repurchased under the program, which may be discontinued at any time, without prior notice. During the nine months ended October 28, 2017, the Company repurchased 1,919,967 shares under the program at an aggregate cost of $24.8 million. The Company repurchased 1,485,195 at an aggregate cost of $17.8 million during the three months ended April 29, 2017 and an additional 434,772 shares at an aggregate cost of $7.0 million during the three months ended October 28, 2017. There were no share repurchases during the three and nine months ended October 29, 2016. As of October 28, 2017, the Company had remaining authority under the program to purchase $423.5 million of its common stock. |
Stockholders' Equity and Redeemable Noncontrolling Interests |
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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 28, 2017 and nine months ended October 28, 2017 is as follows (in thousands, except share data):
Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss), net of related income taxes, for the three and nine months ended October 28, 2017 and October 29, 2016 are as follows (in thousands):
Details on reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) during the three and nine months ended October 28, 2017 and October 29, 2016 are as follows (in thousands):
Redeemable Noncontrolling Interests The Company is 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 and is classified as a redeemable noncontrolling interest outside of permanent equity in the Company’s condensed consolidated balance sheet. During fiscal 2017, the Company and the noncontrolling interest holder increased their capital contributions by $1.7 million, of which $1.0 million was paid by the Company and the remaining amount was paid by the noncontrolling interest holder to retain the same pro-rata interest in Guess Brazil. The carrying value of the redeemable noncontrolling interest related to Guess Brazil was $1.6 million and $1.7 million as of October 28, 2017 and January 28, 2017, respectively. The Company is party to a put arrangement with respect to the common securities that represent the remaining noncontrolling interest for its majority-owned subsidiary, Guess? CIS, LLC (“Guess CIS”), which was established through a majority-owned joint venture during fiscal 2016. The put arrangement for Guess CIS, representing 30% 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 during the period beginning after the fifth anniversary of the agreement through December 31, 2025, or sooner in certain limited circumstances. The redemption value of the Guess CIS put arrangement is based on a multiple of Guess CIS’s earnings before interest, taxes, depreciation and amortization subject to certain adjustments and is classified as a redeemable noncontrolling interest outside of permanent equity in the Company’s condensed consolidated balance sheet. During fiscal 2017, the Company and the noncontrolling interest holder increased their capital contributions by $5.0 million, of which $3.5 million was paid by the Company and the remaining amount was paid by the noncontrolling interest holder to retain the same pro-rata interest in Guess CIS. During the nine months ended October 28, 2017, the Company and the noncontrolling interest holder made an additional capital contribution totaling $3.2 million, of which $2.2 million was paid by the Company and the remaining amount was paid by the noncontrolling interest holder to retain the same pro-rata interest in Guess CIS. The carrying value of the redeemable noncontrolling interest related to Guess CIS was $3.9 million and $2.8 million as of October 28, 2017 and January 28, 2017, respectively. The Company was previously party to a put arrangement in connection with its now wholly-owned subsidiary, Guess Sud SAS (“Guess Sud”). Under the terms of this put arrangement, which represented 40% of the total outstanding interest of that subsidiary, the noncontrolling interest holder had the option to exercise the put arrangement at its discretion by providing written notice to the Company any time after January 30, 2012. The redemption value of the put arrangement was determined based on a method which approximated fair value. During fiscal 2017, the Company acquired the remaining 40% interest in Guess Sud for $4.4 million. |
Accounts Receivable |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable | Accounts Receivable Accounts receivable is summarized as follows (in thousands):
Accounts receivable consists of trade receivables relating primarily to the Company’s wholesale business in Europe and, to a lesser extent, to its wholesale businesses in the Americas and Asia, royalty receivables relating to its licensing operations, credit card and retail concession receivables related to its retail businesses and certain other receivables. Other receivables generally relate to amounts due to the Company that result from activities that are not related to the direct sale of the Company’s products or collection of royalties. The accounts receivable allowance includes allowances for doubtful accounts, wholesale sales returns and wholesale markdowns. Retail sales returns allowances are included in accrued expenses. |
Inventories |
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Inventories | Inventories Inventories consist of the following (in thousands):
The above balances include an allowance to write down inventories to the lower of cost or net realizable value of $26.9 million and $19.4 million as of October 28, 2017 and January 28, 2017, respectively. |
Restructuring Charges |
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Restructuring Charges | Restructuring Charges During the first quarter of fiscal 2017, the Company implemented a global cost reduction and restructuring plan to better align its global cost and organizational structure with its current strategic initiatives. This plan included the consolidation and streamlining of the Company’s business processes and a reduction in its global workforce and other expenses. These actions resulted in restructuring charges related primarily to cash-based severance costs of $6.1 million during the nine months ended October 29, 2016. The restructuring charges were incurred during the three months ended April 30, 2016. There were no restructuring charges incurred during the three or nine months ended October 28, 2017 related to this plan. The Company does not expect significant future cash-based severance charges to be incurred under this plan as the actions were completed during the first quarter of fiscal 2017. As of October 28, 2017, there were no amounts included in accrued expenses related to these restructuring activities as the Company completed payments for the remaining anticipated costs during the nine months ended October 28, 2017. At January 28, 2017, the Company had a balance of approximately $0.2 million in accrued expenses related to these restructuring activities. The following table summarizes restructuring activities related primarily to severance during the fiscal year ended January 28, 2017 and nine months ended October 28, 2017 (in thousands):
During the nine months ended October 29, 2016, the Company also incurred an estimated exit tax charge of approximately $1.9 million related to its reorganization in Europe as a result of the global cost reduction and restructuring plan. The estimated exit tax charge was recorded during the three months ended April 30, 2016. The exit tax charge has not been finalized with the local authorities and actual amounts could differ significantly from these estimates as negotiations are completed. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense for the interim periods was computed using the tax rate estimated to be applicable for the full fiscal year, adjusted for discrete items. The Company’s effective income tax rate was 508.6% for the nine months ended October 28, 2017, compared to 41.1% for the nine months ended October 29, 2016. The increase in the effective income tax rate during the nine months ended October 28, 2017 compared to the same prior-year period was due primarily to more losses incurred in certain foreign jurisdictions where the Company has valuation allowances, a shift in the distribution of earnings among the Company’s tax jurisdictions within the quarters of the current fiscal year and a lower tax rate on the gain from the sale of a minority interest investment during the same prior-year period. During the nine months ended October 28, 2017, the Company adopted authoritative guidance which requires all income tax effects of stock awards (resulting from an increase or decrease in the fair value of an award from grant date to the vesting date) to be recognized in the income statement when the awards vest or are settled. This is a change from previous guidance that required such activity to be recorded in paid-in capital within stockholders’ equity. As a result, the Company recorded tax shortfalls of approximately $0.7 million as an increase to the Company’s income tax expense in its condensed consolidated statement of income (loss) during the nine months ended October 28, 2017. From time-to-time, the Company is subject to routine income tax audits on various tax matters around the world in the ordinary course of business. As of October 28, 2017, several income tax audits were underway for various periods in multiple jurisdictions. The Company accrues an amount for its estimate of additional income tax liability which the Company, more likely than not, will incur as a result of the ultimate resolution of income tax audits (“uncertain tax positions”). The Company reviews and updates the estimates used in the accrual for uncertain tax positions as more definitive information becomes available from taxing authorities, upon completion of tax audits, upon expiration of statutes of limitation, or upon occurrence of other events. The Company had aggregate accruals for uncertain tax positions, including penalties and interest, of $15.3 million and $14.6 million as of October 28, 2017 and January 28, 2017, respectively. The change in the accrual balance from January 28, 2017 to October 28, 2017 resulted from additional accruals and interest and penalties during the nine months ended October 28, 2017. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company’s businesses are grouped into five reportable segments for management and internal financial reporting purposes: Americas Retail, Europe, Asia, Americas Wholesale and Licensing. The Company’s Americas Retail, Europe, Americas Wholesale and Licensing reportable segments are the same as their respective operating segments. Certain components of the Company’s Asia operating segment are separate operating segments based on region which have been aggregated into the Asia reportable segment for disclosure purposes. During the first quarter of fiscal 2018, net revenue and related costs and expenses for certain globally serviced customers were reclassified into the segment primarily responsible for the relationship. During the third quarter of fiscal 2018, segment results were also adjusted to exclude corporate performance-based compensation costs, net gains (losses) on lease terminations and asset impairment charges due to the fact that these items are no longer included in the segment results provided to the Company’s chief operating decision maker in order to allocate resources and assess performance. Accordingly, segment results have been adjusted for the nine months ended October 28, 2017 as well as the three and nine months ended October 29, 2016 to conform to the current period presentation. Management evaluates segment performance based primarily on revenues and earnings (loss) from operations before corporate performance-based compensation costs, net gains (losses) from lease terminations, asset impairment charges and restructuring charges, if any. The Company believes this segment reporting reflects how its business segments are managed and how each segment’s performance is evaluated by the Company’s chief operating decision maker to assess performance and make resource allocation decisions. The Americas Retail segment includes the Company’s retail and e-commerce operations in North and Central America and its retail operations in South America. The Europe segment includes the Company’s retail, e-commerce and wholesale operations in Europe and the Middle East. The Asia segment includes the Company’s retail, e-commerce and wholesale operations in Asia and the Pacific. The Americas Wholesale segment includes the Company’s wholesale operations in the Americas. The Licensing segment includes the worldwide licensing operations of the Company. The business segment operating results exclude corporate overhead costs, which consist of shared costs of the organization, net gains (losses) on lease terminations, asset impairment charges and restructuring charges. Corporate overhead costs are presented separately and generally include, among other things, the following unallocated corporate costs: accounting and finance, executive compensation, corporate performance-based compensation, facilities, global advertising and marketing, human resources, information technology and legal. Net revenue and earnings (loss) from operations are summarized as follows for the three and nine months ended October 28, 2017 and October 29, 2016 (in thousands):
Due to the seasonal nature of the Company’s business segments, the above net revenue and operating results are not necessarily indicative of the results that may be expected for the full fiscal year. |
Borrowings and Capital Lease Obligations |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings and Capital Lease Obligations | Borrowings and Capital Lease Obligations Borrowings and capital lease obligations are summarized as follows (in thousands):
Mortgage Debt On February 16, 2016, the Company entered into a ten-year $21.5 million real estate secured loan (the “Mortgage Debt”). The Mortgage Debt is secured by the Company’s U.S. distribution center based in Louisville, Kentucky and provides for monthly principal and interest payments based on a 25-year amortization schedule, with the remaining principal balance and any accrued and unpaid interest due at maturity. Outstanding principal balances under the Mortgage Debt bear interest at the one-month LIBOR rate plus 1.5%. As of October 28, 2017, outstanding borrowings under the Mortgage Debt, net of debt issuance costs of $0.1 million, were $20.5 million. At January 28, 2017, outstanding borrowings under the Mortgage Debt, net of debt issuance costs of $0.1 million, were $20.9 million. The Mortgage Debt requires the Company to comply with a fixed charge coverage ratio on a trailing four-quarter basis if consolidated cash, cash equivalents and short term investment balances fall below certain levels. In addition, the Mortgage Debt contains customary covenants, including covenants that limit or restrict the Company’s ability to incur liens on the mortgaged property and enter into certain contractual obligations. Upon the occurrence of an event of default under the Mortgage Debt, the lender may terminate the Mortgage Debt and declare all amounts outstanding to be immediately due and payable. The Mortgage Debt specifies a number of events of default (some of which are subject to applicable grace or cure periods), including, among other things, non-payment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults and material judgment defaults. On February 16, 2016, the Company also entered into a separate interest rate swap agreement, designated as a cash flow hedge, that resulted in a swap fixed rate of approximately 3.06%. This interest rate swap agreement matures in January 2026 and converts the nature of the Mortgage Debt from LIBOR floating-rate debt to fixed-rate debt. The fair value of the interest rate swap asset as of October 28, 2017 and January 28, 2017 was approximately $0.8 million and $0.9 million, respectively. Capital Lease Obligations During the nine months ended October 28, 2017, the Company began the relocation of its European distribution center to the Netherlands. As a result, the Company entered into a capital lease of $16.5 million for equipment used in the new facility. The capital lease provides for monthly minimum lease payments through May 2027 and has an effective interest rate of approximately 6%. As of October 28, 2017, the capital lease obligation was $15.9 million. During the nine months ended October 28, 2017, the Company also entered into a capital lease for $1.5 million related primarily to computer hardware and software. As of October 28, 2017, this capital lease obligation was $1.4 million. The Company previously leased a building in Florence, Italy under a capital lease which provided for minimum lease payments through May 1, 2016. Upon termination of the capital lease, the title of the building was transferred to the Company. The Company had a separate interest rate swap agreement designated as a non-hedging instrument that converted the nature of the capital lease obligation from Euribor floating-rate debt to fixed-rate debt and resulted in a swap fixed rate of 3.55%. This interest rate swap agreement matured on February 1, 2016. Credit Facilities On June 23, 2015, the Company entered into a five-year senior secured asset-based revolving credit facility with Bank of America, N.A. and the other lenders party thereto (the “Credit Facility”). The Credit Facility provides for a borrowing capacity in an amount up to $150 million, including a Canadian sub-facility up to $50 million, subject to a borrowing base. Based on applicable accounts receivable, inventory, eligible cash balances and relevant covenant restrictions as of October 28, 2017, the Company could have borrowed up to $123 million under the Credit Facility. The Credit Facility has an option to expand the borrowing capacity by up to $150 million subject to certain terms and conditions, including the willingness of existing or new lenders to assume such increased amount. The Credit Facility is available for direct borrowings and the issuance of letters of credit, subject to certain letters of credit sublimits, and may be used for working capital and other general corporate purposes. All obligations under the Credit Facility are unconditionally guaranteed by the Company and the Company’s existing and future domestic and Canadian subsidiaries, subject to certain exceptions, and are secured by a first priority lien on substantially all of the assets of the Company and such domestic and Canadian subsidiaries, as applicable. Direct borrowings under the Credit Facility made by the Company and its domestic subsidiaries shall bear interest at the U.S. base rate plus an applicable margin (varying from 0.25% to 0.75%) or at LIBOR plus an applicable margin (varying from 1.25% to 1.75%). The U.S. base rate is based on the greater of (i) the U.S. prime rate, (ii) the federal funds rate, plus 0.5%, and (iii) LIBOR for a 30 day interest period, plus 1.0%. Direct borrowings under the Credit Facility made by the Company’s Canadian subsidiaries shall bear interest at the Canadian prime rate plus an applicable margin (varying from 0.25% to 0.75%) or at the Canadian BA rate plus an applicable margin (varying from 1.25% to 1.75%). The Canadian prime rate is based on the greater of (i) the Canadian prime rate, (ii) the Bank of Canada overnight rate, plus 0.5%, and (iii) the Canadian BA rate for a one month interest period, plus 1.0%. The applicable margins are calculated quarterly and vary based on the average daily availability of the aggregate borrowing base. The Company is also obligated to pay certain commitment, letter of credit and other fees customary for a credit facility of this size and type. As of October 28, 2017, the Company had $1.0 million in outstanding standby letters of credit, no outstanding documentary letters of credit and no outstanding borrowings under the Credit Facility. The Credit Facility requires the Company to comply with a fixed charge coverage ratio on a trailing four-quarter basis if a default or an event of default occurs under the Credit Facility or generally if borrowings exceed 80% of the borrowing base. In addition, the Credit Facility contains customary covenants, including covenants that limit or restrict the Company and certain of its subsidiaries’ ability to: incur liens, incur indebtedness, make investments, dispose of assets, make certain restricted payments, merge or consolidate and enter into certain transactions with affiliates. Upon the occurrence of an event of default under the Credit Facility, the lenders may cease making loans, terminate the Credit Facility and declare all amounts outstanding to be immediately due and payable. The Credit Facility specifies a number of events of default (some of which are subject to applicable grace or cure periods), including, among other things, non-payment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults and material judgment defaults. The Credit Facility allows for both secured and unsecured borrowings outside of the Credit Facility up to specified amounts. The Company, through its European subsidiaries, maintains short-term uncommitted borrowing agreements, primarily for working capital purposes, with various banks in Europe. The majority of the borrowings under these agreements are secured by specific accounts receivable balances. Based on the applicable accounts receivable balances as of October 28, 2017, the Company could have borrowed up to $69.2 million under these agreements. As of October 28, 2017, the Company had no outstanding borrowings or outstanding documentary letters of credit under these agreements. The agreements are denominated primarily in euros and provide for annual interest rates ranging from 0.5% to 4.6%. The maturities of any short-term borrowings under these arrangements are generally linked to the credit terms of the underlying accounts receivable that secure the borrowings. With the exception of one facility for up to $40.6 million that has a minimum net equity requirement, there are no other financial ratio covenants. Other From time-to-time, the Company will obtain other financing in foreign countries for working capital to finance its local operations. |
Share-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation The following table summarizes the share-based compensation expense recognized under all of the Company’s stock plans during the three and nine months ended October 28, 2017 and October 29, 2016 (in thousands):
During the first quarter of fiscal 2018, the Company adopted authoritative guidance which eliminates the requirement to estimate forfeitures, but rather provides for an election that would allow entities to account for forfeitures as they occur. The Company adopted this election using the modified retrospective method and recorded a cumulative adjustment to reduce retained earnings by approximately $0.3 million as of the beginning of the period of adoption. Unrecognized compensation cost related to nonvested stock options and nonvested stock awards/units totaled approximately $4.3 million and $33.4 million, respectively, as of October 28, 2017. This cost is expected to be recognized over a weighted average period of 1.7 years. The weighted average grant date fair value of stock options granted was $1.57 and $3.53 during the nine months ended October 28, 2017 and October 29, 2016, respectively. Grants On April 28, 2017, the Company granted select key management 1,056,042 nonvested stock units which are subject to certain performance-based vesting or market-based vesting conditions. On April 29, 2016, the Company granted select key management 602,816 nonvested stock units which are subject to certain performance-based vesting or market-based vesting conditions. Annual Grants On March 29, 2017, the Company made an annual grant of 1,283,175 stock options and 707,675 nonvested stock awards/units to its employees. On March 30, 2016, the Company made an annual grant of 616,450 stock options and 442,000 nonvested stock awards/units to its employees. Performance-Based Awards The Company has granted certain nonvested stock units subject to performance-based vesting conditions to select executive officers. Each award of nonvested stock units generally has an initial vesting period from the date of the grant through either (i) the end of the first fiscal year or (ii) the first anniversary of the date of grant, followed by annual vesting periods which may range from two-to-three years. The nonvested stock units are subject to the achievement of certain performance-based vesting conditions. The Company has also granted a target number of nonvested stock units to select key management, including certain executive officers. The number of shares that may ultimately vest with respect to each award may range from 0% up to 200% of the target number of shares, subject to the achievement of certain performance-based vesting conditions. Any shares that are ultimately issued are scheduled to vest at the end of the third fiscal year following the grant date. The following table summarizes the activity for nonvested performance-based units during the nine months ended October 28, 2017:
Market-Based Awards The Company has granted certain nonvested stock units subject to market-based vesting conditions to select executive officers. The number of shares that may ultimately vest will equal 0% to 150% of the target number of shares, subject to the performance of the Company’s total stockholder return (“TSR”) relative to the TSR of a select group of peer companies over a three-year period. Vesting is also subject to continued service requirements through the vesting date. The following table summarizes the activity for nonvested market-based units during the nine months ended October 28, 2017:
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Related Party Transactions |
9 Months Ended |
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Oct. 28, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company and its subsidiaries periodically enter into transactions with other entities or individuals that are considered related parties, including certain transactions with entities affiliated with trusts for the respective benefit of Paul Marciano, who is an executive and member of the Board of the Company, and Maurice Marciano, Chairman Emeritus and member of the Board, and certain of their children (the “Marciano Trusts”). Leases The Company leases warehouse and administrative facilities, including the Company’s corporate headquarters in Los Angeles, California, from partnerships affiliated with the Marciano Trusts and certain of their affiliates. There were four of these leases in effect as of October 28, 2017 with expiration or option exercise dates ranging from calendar years 2018 to 2020. The Company, through a wholly-owned Canadian subsidiary, leases warehouse and administrative facilities in Montreal, Quebec from a partnership affiliated with the Marciano Trusts. During the third quarter of fiscal 2018, the Company exercised an option to extend the lease term for an additional one-year period ending in December 2018. All other terms of the existing lease remain in full force and effect. The Company, through a French subsidiary, leases a showroom and office space located in Paris, France from an entity that is owned in part by an affiliate of the Marciano Trusts. Due to excess capacity, the lease was amended to reduce the square footage by approximately 5,100 square feet to 16,000 square feet during the nine months ended October 28, 2017. The amendment also provided for a corresponding reduction in aggregate rent, common area maintenance charges and property tax expense due to the lower square footage. All other terms of the existing lease remain in full force and effect. In January 2016, the Company sold an approximately 140,000 square foot parking lot located adjacent to the Company’s corporate headquarters to a partnership affiliated with the Marciano Trusts for a sales price of $7.5 million, which was subsequently collected during the nine months ended October 29, 2016. Concurrent with the sale, the Company entered into a lease agreement to lease back the parking lot from the purchaser. Aggregate rent, common area maintenance charges and property tax expense recorded under these four related party leases were approximately $3.6 million and $3.8 million for the nine months ended October 28, 2017 and October 29, 2016, respectively. The Company believes that the terms of the related party leases and parking lot sale have not been significantly affected by the fact that the Company and the lessors are related. Aircraft Arrangements The Company periodically charters aircraft owned by MPM Financial, LLC (“MPM Financial”), an entity affiliated with the Marciano Trusts, through informal arrangements with MPM Financial and independent third party management companies contracted by MPM Financial to manage its aircraft. The total fees paid under these arrangements for the nine months ended October 28, 2017 and October 29, 2016 were approximately $0.7 million and $0.8 million, respectively. These related party disclosures should be read in conjunction with the disclosure concerning related party transactions in the Company’s Annual Report on Form 10-K for the year ended January 28, 2017. |
Commitments and Contingencies |
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Oct. 28, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases The Company leases its showrooms, advertising, licensing, sales and merchandising offices, remote distribution and warehousing facilities and retail and factory outlet store locations under operating lease agreements expiring on various dates through November 2036. Some of these leases require the Company to make periodic payments for property taxes, utilities and common area operating expenses. Certain retail store leases provide for rents based upon the minimum annual rental amount and a percentage of annual sales volume, generally ranging from 4% to 20%, when specific sales volumes are exceeded. The Company’s concession leases also provide for rents primarily based upon a percentage of annual sales volume which average approximately 35% of annual sales volume. Some leases include lease incentives, rent abatements and fixed rent escalations, which are amortized and recorded over the initial lease term on a straight-line basis. The Company also leases some of its equipment under operating lease agreements expiring at various dates through August 2022. As discussed in further detail in Note 9, the Company leases equipment as well as computer hardware and software under capital lease obligations. Investment Commitments As of October 28, 2017, the Company had an unfunded commitment to invest €4.5 million ($5.3 million) in a private equity fund. Refer to Note 14 for further information. Legal Proceedings On May 6, 2009, Gucci America, Inc. filed a complaint in the U.S. District Court for the Southern District of New York against Guess?, Inc. and certain third party licensees for the Company asserting, among other things, trademark and trade dress law violations and unfair competition. The complaint sought injunctive relief, compensatory damages, including treble damages, and certain other relief. Complaints similar to those in the above action have also been filed by Gucci entities against the Company and certain of its subsidiaries in the Court of Milan, Italy, the Intermediate People’s Court of Nanjing, China and the Court of Paris, France. The three-week bench trial in the U.S. matter concluded on April 19, 2012, with the court issuing a preliminary ruling on May 21, 2012 and a final ruling on July 19, 2012. Although the plaintiff was seeking compensation in the U.S. matter in the form of damages of $26 million and an accounting of profits of $99 million, the final ruling provided for monetary damages of $2.3 million against the Company and $2.3 million against certain of its licensees. The court also granted narrow injunctions in favor of the plaintiff for certain of the claimed infringements. On August 20, 2012, the appeal period expired without any party having filed an appeal, rendering the judgment final. On May 2, 2013, the Court of Milan ruled in favor of the Company in the Milan, Italy matter. In the ruling, the Court rejected all of the plaintiff’s claims and ordered the cancellation of three of the plaintiff’s Italian and four of the plaintiff’s European Community trademark registrations. On June 10, 2013, the plaintiff appealed the Court’s ruling in the Milan matter. On September 15, 2014, the Court of Appeal of Milan affirmed the majority of the lower Court’s ruling in favor of the Company, but overturned the lower Court’s finding with respect to an unfair competition claim. That portion of the matter is now in a damages phase based on the ruling. On October 16, 2015, the plaintiff appealed the remainder of the Court of Appeal of Milan’s ruling in favor of the Company to the Italian Supreme Court of Cassation. In the China matter, the Intermediate People’s Court of Nanjing, China issued a ruling on November 8, 2013 granting an injunction in favor of the plaintiff for certain of the claimed infringements on handbags and small leather goods and awarding the plaintiff statutory damages in the amount of approximately $80,000. The Company strongly disagreed with the Court’s decision and appealed the ruling. On August 31, 2016, the Court of Appeal for the China matter issued a decision in favor of the Company, rejecting all of the plaintiff’s claims. In March 2017, the plaintiff petitioned the China Supreme Court for a retrial of the matter. On January 30, 2015, the Court of Paris ruled in favor of the Company in the France matter, rejecting all of the plaintiff’s claims and partially canceling two of the plaintiff’s community trademark registrations and one of the plaintiff’s international trademark registrations. On February 17, 2015, the plaintiff appealed the Court of Paris’ ruling. Although the Company believes that it has a strong position and will continue to vigorously defend each of the remaining matters, it is unable to predict with certainty whether or not these efforts will ultimately be successful or whether the outcomes will have a material impact on the Company’s financial position or results of operations. The Company has received customs tax assessment notices from the Italian Customs Agency regarding its customs tax audit of one of the Company’s European subsidiaries for the period from July 2010 through December 2012. Such assessments totaled €9.8 million ($11.4 million), including potential penalties and interest. The Company strongly disagrees with the positions that the Italian Customs Agency has taken and therefore filed appeals with the Milan First Degree Tax Court (“MFDTC”). In May 2015, the MFDTC issued a judgment in favor of the Company in relation to the first set of appeals (covering the period through September 2010) and canceled the related assessments totaling €1.7 million ($1.9 million). In November 2015, the Italian Customs Agency notified the Company of its intent to appeal this first MFDTC judgment. During fiscal 2017, the Appeals Court ruled in favor of the Company and rejected the appeal by the Italian Customs Agency on the first MFDTC judgment. During fiscal 2017, the MFDTC also issued judgments in favor of the Company in relation to the second through seventh set of appeals (covering the period from October 2010 through December 2012) and canceled the related assessments totaling €8.1 million ($9.5 million). Subsequently, the Italian Customs Agency has appealed the majority of these favorable MFDTC judgments, as well as certain of the Appeals Court judgments. While these MFDTC judgments have been favorable to the Company, there can be no assurances that the Italian Customs Agency will not be successful in its remaining appeals. It also continues to be possible that the Company will receive similar or even larger assessments for periods subsequent to December 2012 or other claims or charges related to the matter in the future. Although the Company believes that it has a strong position and will continue to vigorously defend this matter, it is unable to predict with certainty whether or not these efforts will ultimately be successful or whether the outcome will have a material impact on the Company’s financial position or results of operations. On June 6, 2017, the European Commission notified the Company that it has initiated proceedings to investigate whether certain of the Company’s practices and agreements concerning the distribution of apparel and accessories within the European Union breach European Union competition rules related to cross-border transactions, internet sales limitations and resale price restrictions. The initiation of the proceedings does not mean that the European Commission has made a definitive conclusion regarding whether the Company breached any rules. The Company has cooperated and plans to continue to cooperate with the European Commission, including through responses to requests for information and through changes to certain business practices and agreements, as appropriate. If a violation is ultimately found, a broad range of remedies is potentially available to the European Commission, including imposing a fine and/or injunctive relief prohibiting or restricting certain business practices. As of November 6, 2017, the Company and the European Commission agreed to begin a settlement discussion process to determine if the parties can mutually agree on an outcome of the proceedings. Those discussions are still in a preliminary stage. At this point, the Company is unable to predict the timing or outcome of these proceedings, including the magnitude of any potential fine. However, the Company does not currently believe that any changes to its business practices or agreements made in connection with this proceeding will have a material impact on its ongoing business operations within the European Union. The Company is also involved in various other claims and other matters incidental to the Company’s business, the resolutions of which are not expected to have a material adverse effect on the Company’s financial position or results of operations. |
Defined Benefit Plans |
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Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans | Defined Benefit Plans Supplemental Executive Retirement Plan On August 23, 2005, the Board of Directors of the Company adopted a Supplemental Executive Retirement Plan (“SERP”) which became effective January 1, 2006. The SERP provides select employees who satisfy certain eligibility requirements with certain benefits upon retirement, termination of employment, death, disability or a change in control of the Company, in certain prescribed circumstances. As a non-qualified pension plan, no dedicated funding of the SERP is required; however, the Company has made periodic payments into insurance policies held in a rabbi trust to fund the expected obligations arising under the non-qualified SERP. The amount of any future payments into the insurance policies, if any, may vary depending on investment performance of the trust. The cash surrender values of the insurance policies were $62.8 million and $58.6 million as of October 28, 2017 and January 28, 2017, respectively, and were included in other assets in the Company’s condensed consolidated balance sheets. As a result of changes in the value of the insurance policy investments, the Company recorded unrealized gains of $1.6 million and $5.5 million in other income during the three and nine months ended October 28, 2017, respectively, and unrealized gains (losses) of $(0.5) million and $4.6 million in other income and expense during the three and nine months ended October 29, 2016, respectively. The projected benefit obligation was $53.6 million and $53.5 million as of October 28, 2017 and January 28, 2017, respectively, and was included in accrued expenses and other long-term liabilities in the Company’s condensed consolidated balance sheets depending on the expected timing of payments. SERP benefit payments of $0.4 million and $1.3 million were made during the three and nine months ended October 28, 2017, respectively. SERP benefit payments of $0.4 million and $1.3 million were made during the three and nine months ended October 29, 2016, respectively. Swiss Pension Plan In accordance with local regulations, the Company also maintains a pension plan in Switzerland for certain of its employees. The plan is a government-mandated defined contribution plan that provides employees with a minimum investment return determined annually by the Swiss government, and as such, is treated under pension accounting in accordance with authoritative guidance. Under the plan, both the Company and certain of its employees with annual earnings in excess of government determined amounts are required to make contributions into a fund managed by an independent investment fiduciary. The Company’s contributions must be made in an amount at least equal to the employee’s contribution. Minimum employee contributions are based on the respective employee’s age, salary and gender. As of October 28, 2017 and January 28, 2017, the plan had a projected benefit obligation of $18.9 million and $17.6 million, respectively, and plan assets held at the independent investment fiduciary of $15.4 million and $14.1 million, respectively. The net liability of $3.5 million was included in other long-term liabilities in the Company’s condensed consolidated balance sheets as of October 28, 2017 and January 28, 2017. The components of net periodic defined benefit pension cost for the three and nine months ended October 28, 2017 and October 29, 2016 related to the Company’s defined benefit plans are as follows (in thousands):
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Authoritative guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that can be accessed at the measurement date. Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e. interest rates, yield curves, etc.) and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3—Unobservable inputs that reflect assumptions about what market participants would use in pricing the asset or liability. These inputs would be based on the best information available, including the Company’s own data. The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of October 28, 2017 and January 28, 2017 (in thousands):
There were no transfers of financial instruments between the three levels of fair value hierarchy during the nine months ended October 28, 2017 or during the year ended January 28, 2017. Foreign exchange currency contracts are entered into by the Company principally to hedge the future payment of inventory and intercompany transactions by non-U.S. subsidiaries. Periodically, the Company may also use foreign exchange currency contracts to hedge the translation and economic exposures related to its net investments in certain of its international subsidiaries. The fair values of the Company’s foreign exchange currency contracts are based on quoted foreign exchange forward rates at the reporting date. Fair values of the Company’s interest rate swaps are based upon inputs corroborated by observable market data. Deferred compensation obligations to employees are adjusted based on changes in the fair value of the underlying employee-directed investments. Fair value of these obligations is based upon inputs corroborated by observable market data. During the nine months ended October 28, 2017, the Company invested €0.5 million ($0.5 million) in a private equity fund, which was included in other assets in the Company’s condensed consolidated balance sheet as of October 28, 2017. As permitted in accordance with authoritative guidance, the Company uses net asset value per share as a practical expedient to measure the fair value of this investment and has not included this investment in the fair value hierarchy as disclosed above. As of October 28, 2017, the Company had an unfunded commitment to invest an additional €4.5 million ($5.3 million) in the private equity fund. The carrying amount of the Company’s remaining financial instruments, which principally include cash and cash equivalents, trade receivables, accounts payable and accrued expenses, approximates fair value due to the relatively short maturity of such instruments. The fair values of the Company’s debt instruments (see Note 9) are based on the amount of future cash flows associated with each instrument discounted using the Company’s incremental borrowing rate. As of October 28, 2017 and January 28, 2017, the carrying value of all financial instruments was not materially different from fair value, as the interest rates on the Company’s debt approximated rates currently available to the Company. Long-Lived Assets Long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment quarterly or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The majority of the Company’s long-lived assets relate to its retail operations which consist primarily of regular retail and flagship locations. The Company considers each individual regular retail location as an asset group for impairment testing, which is the lowest level at which individual cash flows can be identified. The asset group includes leasehold improvements, furniture, fixtures and equipment, computer hardware and software and certain long-term security deposits and lease acquisition costs. The Company reviews regular retail locations in penetrated markets for impairment risk once the locations have been opened for at least one year in their current condition, or sooner as changes in circumstances require. The Company believes that waiting at least one year allows a location to reach a maturity level where a more comprehensive analysis of financial performance can be performed. The Company evaluates impairment risk for regular retail locations in new markets, where the Company is in the early stages of establishing its presence, once brand awareness has been established. The Company also evaluates impairment risk for retail locations that are expected to be closed in the foreseeable future. The Company has flagship locations which are used as a regional marketing tool to build brand awareness and promote the Company’s current product. Impairment for these locations is tested at a reporting unit level similar to goodwill since they do not have separately identifiable cash flows. An asset is considered to be impaired if the Company determines that the carrying value may not be recoverable based upon its assessment of the asset’s ability to continue to generate earnings from operations and positive cash flow in future periods or if significant changes in the Company’s strategic business objectives and utilization of the assets occurred. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the estimated fair value, which is determined based on discounted future cash flows. The impairment loss calculations require management to apply judgment in estimating future cash flows and the discount rates that reflect the risk inherent in future cash flows. Future expected cash flows for assets in regular retail locations are based on management’s estimates of future cash flows over the remaining lease period or expected life, if shorter. For expected location closures, the Company will evaluate whether it is necessary to shorten the useful life for any of the assets within the respective asset group. The Company will use this revised useful life when estimating the asset group’s future cash flows. The Company considers historical trends, expected future business trends and other factors when estimating the future cash flow for each regular retail location. The Company also considers factors such as: the local environment for each regular retail location, including mall traffic and competition; the Company’s ability to successfully implement strategic initiatives; and the ability to control variable costs such as cost of sales and payroll and, in some cases, renegotiate lease costs. The estimated cash flows used for this nonrecurring fair value measurement are considered a Level 3 input as defined above. If actual results are not consistent with the assumptions and judgments used in estimating future cash flows and asset fair values, there may be additional exposure to future impairment losses that could be material to the Company’s results of operations. The Company recorded asset impairment charges of $2.0 million and $6.0 million during the three and nine months ended October 28, 2017, respectively, and $0.8 million and $1.5 million during the three and nine months ended October 29, 2016, respectively. The asset impairment charges related primarily to the impairment of certain retail locations in North America resulting from under-performance and expected store closures during each of the respective periods. |
Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments Hedging Strategy Foreign Exchange Currency Contracts The Company operates in foreign countries, which exposes it to market risk associated with foreign currency exchange rate fluctuations. The Company has entered into certain forward contracts to hedge the risk of foreign currency rate fluctuations. The Company has elected to apply the hedge accounting rules in accordance with authoritative guidance for certain of these hedges. The Company’s primary objective is to hedge the variability in forecasted cash flows due to the foreign currency risk. Various transactions that occur primarily in Europe, Canada, South Korea, China and Mexico are denominated in U.S. dollars, British pounds and Russian roubles and thus are exposed to earnings risk as a result of exchange rate fluctuations when converted to their functional currencies. These types of transactions include U.S. dollar denominated purchases of merchandise and U.S. dollar and British pound denominated intercompany liabilities. In addition, certain operating expenses, tax liabilities and pension-related liabilities are denominated in Swiss francs and are exposed to earnings risk as a result of exchange rate fluctuations when converted to the functional currency. The Company enters into derivative financial instruments, including forward exchange currency contracts, to offset some but not all of the exchange risk on certain of these anticipated foreign currency transactions. Periodically, the Company may also use foreign exchange currency contracts to hedge the translation and economic exposures related to its net investments in certain of its international subsidiaries. Interest Rate Swap Agreements The Company is exposed to interest rate risk on its floating-rate debt. The Company has entered into interest rate swap agreements to effectively convert its floating-rate debt to a fixed-rate basis. The principal objective of these contracts is to eliminate or reduce the variability of the cash flows in interest payments associated with the Company’s floating-rate debt, thus reducing the impact of interest rate changes on future interest payment cash flows. The Company has elected to apply the hedge accounting rules in accordance with authoritative guidance for certain of these contracts. Refer to Note 9 for further information. The impact of the credit risk of the counterparties to the derivative contracts is considered in determining the fair value of the foreign exchange currency contracts and interest rate swap agreements. As of October 28, 2017, credit risk has not had a significant effect on the fair value of the Company’s foreign exchange currency contracts and interest rate swap agreements. Hedge Accounting Policy Foreign Exchange Currency Contracts U.S. dollar forward contracts are used to hedge forecasted merchandise purchases over specific months. Changes in the fair value of these U.S. dollar forward contracts, designated as cash flow hedges, are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are recognized in cost of product sales in the period which approximates the time the hedged merchandise inventory is sold. The Company also hedges forecasted intercompany royalties over specific months. Changes in the fair value of these U.S. dollar forward contracts, designated as cash flow hedges, are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are recognized in other income and expense in the period in which the royalty expense is incurred. The Company has also used U.S. dollar forward contracts to hedge the net investments of certain of the Company’s international subsidiaries over specific months. Changes in the fair value of these U.S. dollar forward contracts, designated as net investment hedges, are recorded in foreign currency translation adjustment as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are not recognized in earnings (loss) until the sale or liquidation of the hedged net investment. The Company also has foreign exchange currency contracts that are not designated as hedging instruments for accounting purposes. Changes in fair value of foreign exchange currency contracts not designated as hedging instruments are reported in net earnings (loss) as part of other income and expense. Interest Rate Swap Agreements Interest rate swap agreements are used to hedge the variability of the cash flows in interest payments associated with the Company’s floating-rate debt. Changes in the fair value of interest rate swap agreements designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are amortized to interest expense over the term of the related debt. Periodically, the Company may also enter into interest rate swap agreements that are not designated as hedging instruments for accounting purposes. Changes in the fair value of interest rate swap agreements not designated as hedging instruments are reported in net earnings (loss) as part of other income and expense. Summary of Derivative Instruments The fair value of derivative instruments in the condensed consolidated balance sheets as of October 28, 2017 and January 28, 2017 is as follows (in thousands):
Derivatives Designated as Hedging Instruments Foreign Exchange Currency Contracts Designated as Cash Flow Hedges During the nine months ended October 28, 2017, the Company purchased U.S. dollar forward contracts in Europe and Canada totaling US$108.7 million and US$20.8 million, respectively, that were designated as cash flow hedges. As of October 28, 2017, the Company had forward contracts outstanding for its European and Canadian operations of US$140.6 million and US$44.4 million, respectively, to hedge forecasted merchandise purchases and intercompany royalties, which are expected to mature over the next 15 months. As of October 28, 2017, accumulated other comprehensive income (loss) related to foreign exchange currency contracts included a net unrealized loss of approximately $6.3 million, net of tax, of which $4.7 million will be recognized in cost of product sales or other expense over the following 12 months, at the then current values on a pre-tax basis, which can be different than the current quarter-end values. At January 28, 2017, the Company had forward contracts outstanding for its European and Canadian operations of US$104.2 million and US$66.9 million, respectively, that were designated as cash flow hedges. Interest Rate Swap Agreement Designated as Cash Flow Hedge During fiscal 2017, the Company entered into an interest rate swap agreement with a notional amount of $21.5 million, designated as a cash flow hedge, to hedge the variability of cash flows in interest payments associated with the Company’s floating-rate debt. This interest rate swap agreement matures in January 2026 and converts the nature of the Company’s real estate secured term loan from LIBOR floating-rate debt to fixed-rate debt, resulting in a swap fixed rate of approximately 3.06%. As of October 28, 2017, accumulated other comprehensive income (loss) related to the interest rate swap agreement included a net unrealized gain of approximately $0.5 million, net of tax, which will be recognized in interest expense after the following 12 months, at the then current values on a pre-tax basis, which can be different than the current quarter-end values. The following table summarizes the gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) for the three and nine months ended October 28, 2017 and October 29, 2016 (in thousands):
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The following table summarizes net after-tax derivative activity recorded in accumulated other comprehensive income (loss) (in thousands):
Derivatives Not Designated as Hedging Instruments As of October 28, 2017, the Company had euro foreign exchange currency contracts to purchase US$70.8 million and Canadian dollar foreign exchange currency contracts to purchase US$16.6 million expected to mature over the next 11 months. The following table summarizes the gains (losses) before taxes recognized on the derivative instruments not designated as hedging instruments in other income and expense for the three and nine months ended October 28, 2017 and October 29, 2016 (in thousands):
At January 28, 2017, the Company had euro foreign exchange currency contracts to purchase US$81.4 million and Canadian dollar foreign exchange currency contracts to purchase US$13.9 million. |
Subsequent Events |
9 Months Ended |
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Oct. 28, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Share Repurchases Subsequent to the third quarter of fiscal 2018, the Company repurchased approximately 0.6 million shares under its share repurchase program at an aggregate cost of $9.1 million. Dividends On November 21, 2017, the Company announced a regular quarterly cash dividend of $0.225 per share on the Company’s common stock. The cash dividend will be paid on January 3, 2018 to shareholders of record as of the close of business on December 13, 2017. |
Basis of Presentation (Policies) |
9 Months Ended |
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Oct. 28, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reclassifications | Reclassifications The Company has made certain reclassifications to current year-to-date and prior year amounts to conform to the current period presentation within the accompanying notes to the condensed consolidated financial statements. |
New Accounting Guidance | New Accounting Guidance Changes in Accounting Policies In July 2015, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance to simplify the subsequent measurement of inventories by replacing the lower of cost or market test with a lower of cost or net realizable value test. The Company adopted this guidance effective January 29, 2017 on a prospective basis. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures. In March 2016, the FASB issued authoritative guidance to simplify the accounting for certain aspects of share-based compensation. This guidance addresses the accounting for income tax effects at award settlement, the use of an expected forfeiture rate to estimate award cancellations prior to the vesting date and the presentation of excess tax benefits and shares surrendered for tax withholdings on the statement of cash flows. The Company adopted this guidance effective January 29, 2017. This guidance requires all income tax effects of awards (resulting from an increase or decrease in the fair value of an award from grant date to the vesting date) to be recognized in the income statement when the awards vest or are settled. This is a change from previous guidance that required such activity to be recorded in paid-in capital within stockholders’ equity. The Company adopted this provision prospectively and accordingly recorded tax shortfalls of approximately $0.7 million as an increase to the Company’s income tax expense in its condensed consolidated statement of income (loss) during the nine months ended October 28, 2017. This resulted in a negative impact on net loss attributable to Guess?, Inc. of approximately $0.7 million, or an unfavorable $0.01 per share impact during the nine months ended October 28, 2017. The Company recorded minimal tax shortfalls related to the adoption of this guidance during the three months ended October 28, 2017. Under this guidance, excess tax benefits are also excluded from the assumed proceeds available to repurchase shares in the computation of diluted earnings (loss) per share. This was adopted prospectively and did not have an impact on the Company’s diluted loss per share for the three or nine months ended October 28, 2017. This guidance also eliminates the requirement to estimate forfeitures, but rather provides for an election that would allow entities to account for forfeitures as they occur. The Company adopted this election beginning in the first quarter of fiscal 2018 using the modified retrospective method and recorded a cumulative adjustment to reduce retained earnings by approximately $0.3 million. This guidance also changes the presentation of excess tax benefits from a financing activity to an operating activity in the statement of cash flows. This presentation was adopted on a retrospective basis and, as a result, net cash used in operating activities improved by $0.2 million with a corresponding offset to net cash used in financing activities during the nine months ended October 29, 2016. In August 2016, the FASB issued authoritative guidance related to the classification of certain cash receipts and cash payments in the statement of cash flows. The Company adopted this guidance effective January 29, 2017 on a retrospective basis. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures. In October 2016, the FASB issued authoritative guidance that requires an entity to include indirect interests held through related parties that are under common control on a proportionate basis when evaluating if a reporting entity is the primary beneficiary of a variable interest entity. The Company adopted this guidance effective January 29, 2017. The adoption of this guidance did not have an impact on the Company’s condensed consolidated financial statements or related disclosures. In November 2016, the FASB issued authoritative guidance related to the presentation of restricted cash in the statement of cash flows. This guidance requires that the statement of cash flows reconcile the change during the period in total cash, cash equivalents and restricted cash. The Company’s restricted cash is generally held as collateral for certain transactions. The Company adopted this guidance effective January 29, 2017 on a retrospective basis. As a result, the Company updated its condensed consolidated statements of cash flows for the nine months ended October 28, 2017 and October 29, 2016 to include restricted cash with cash and cash equivalents when reconciling the beginning and end of period balances and to eliminate changes in restricted cash that have historically been included within operating and investing activities. In January 2017, the FASB issued authoritative guidance which clarifies the definition of a business to assist entities when evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The Company early adopted this guidance effective January 29, 2017 on a prospective basis. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures. Recently Issued Accounting Guidance In May 2014, the FASB issued a comprehensive new revenue recognition standard which will supersede previous existing revenue recognition guidance. The standard is intended to clarify the principles of recognizing revenue and create common revenue recognition guidance between GAAP and International Financial Reporting Standards. The standard also requires expanded disclosures surrounding revenue recognition. During fiscal 2017, the FASB issued additional clarification guidance on the new revenue recognition standard which also included certain scope improvements and practical expedients. The standard (including clarification guidance issued) is effective for fiscal periods beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, and allows for either full retrospective or modified retrospective adoption, with early adoption permitted. The Company plans to adopt this guidance using the modified retrospective method beginning in the first quarter of fiscal 2019. The Company’s assessment efforts to date have included reviewing current revenue processes, arrangements and accounting policies to identify potential differences that could arise from the application of this standard on its consolidated financial statements and related disclosures. The Company expects the differences to relate primarily to the classification and timing of when revenue and certain expenses are recognized from its licensing business, loyalty programs and gift card breakage. The Company also expects revenue related to its e-commerce operations to be recognized when merchandise is transferred to a common carrier rather than upon receipt by the customer. The Company is continuing to evaluate the financial impact of the adoption of this standard on its consolidated financial statements and related disclosures. In January 2016, the FASB issued authoritative guidance which requires equity investments not accounted for under the equity method of accounting or consolidation accounting to be measured at fair value, with subsequent changes in fair value recognized in net income. This guidance also addresses other recognition, measurement, presentation and disclosure requirements for financial instruments. This guidance is effective for fiscal years beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, and requires a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures unless the Company acquires new equity investments. In February 2016, the FASB issued a comprehensive new lease standard which will supersede previous lease guidance. The standard requires a lessee to recognize assets and liabilities related to long-term leases that were classified as operating leases under previous guidance in its balance sheet. An asset would be recognized related to the right to use the underlying asset and a liability would be recognized related to the obligation to make lease payments over the term of the lease. The standard also requires expanded disclosures surrounding leases. The standard is effective for fiscal periods beginning after December 15, 2018, which will be the Company’s first quarter of fiscal 2020, and requires modified retrospective adoption, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and related disclosures, but expects there will be a material increase in its long-term assets and liabilities resulting from the adoption. In June 2016, the FASB issued authoritative guidance related to the measurement of credit losses on financial instruments. This guidance is effective for fiscal years beginning after December 15, 2019, which will be the Company’s first quarter of fiscal 2021. Early adoption is permitted for fiscal periods beginning after December 15, 2018, which will be the Company’s first quarter of fiscal 2020. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and related disclosures. In October 2016, the FASB issued authoritative guidance which amends the accounting for income taxes on intra-entity transfers of assets other than inventory. This guidance requires that entities recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. The income tax consequences on intra-entity transfers of inventory will continue to be deferred until the inventory has been sold to a third party. This guidance is effective for fiscal years beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, and requires a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Early adoption is permitted at the beginning of a fiscal year. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures. In January 2017, the FASB issued authoritative guidance to simplify the testing for goodwill impairment by removing step two from the goodwill testing. Under current guidance, if the fair value of a reporting unit is lower than its carrying amount (step one), an entity would calculate an impairment charge by comparing the implied fair value of goodwill with its carrying amount (step two). The implied fair value of goodwill was calculated by deducting the fair value of the assets and liabilities of the respective reporting unit from the reporting unit’s fair value as determined under step one. This guidance instead provides that an impairment charge should be recognized based on the difference between a reporting unit’s fair value and its carrying value. This guidance also does not require a qualitative test to be performed on reporting units with zero or negative carrying amounts. However, entities need to disclose any reporting units with zero or negative carrying amounts that have goodwill and the amount of goodwill allocated to each. This guidance is effective for fiscal years beginning after December 15, 2019, which will be the Company’s first quarter of fiscal 2021, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures. In March 2017, the FASB issued authoritative guidance related to the presentation of net periodic pension cost in the income statement. This guidance requires that the service cost component of net periodic pension cost is presented in the same line as other compensation costs arising from services rendered by the employees during the period. The other non-service components of net periodic pension cost are required to be presented in the income statement separately from the service cost component and outside of earnings from operations. This guidance also allows for the service cost component to be eligible for capitalization when applicable. This guidance is effective for fiscal years beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, and requires retrospective adoption for the presentation of the service cost component and other non-service components of net periodic pension cost in the income statement and prospective adoption for capitalization of the service cost component. Early adoption is permitted at the beginning of a fiscal year. Other than the change in presentation of other non-service components of net periodic pension cost within the Company’s consolidated statements of income, the adoption of this guidance is not expected to have an impact on the Company’s consolidated financial statements and related disclosures. In May 2017, the FASB issued authoritative guidance that provides clarification on accounting for modifications in share-based payment awards. This guidance is effective for fiscal years beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, with early adoption permitted. The adoption of this guidance is not expected to have an impact on the Company’s consolidated financial statements or related disclosures unless there are modifications to the Company’s share-based payment awards. In August 2017, the FASB issued authoritative guidance to better align the results of hedge accounting with an entity’s risk management activities. This guidance updates the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. This guidance is effective for fiscal years beginning after December 15, 2018, which will be the Company’s first quarter of fiscal 2020, and requires a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption, with early adoption permitted. The updated presentation and disclosure guidance is required only on a prospective basis. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and related disclosures. |
Earnings (Loss) Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of basic and diluted net earnings (loss) per common share attributable to common stockholders | The computation of basic and diluted net earnings (loss) per common share attributable to common stockholders is as follows (in thousands, except per share data):
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Stockholders' Equity and Redeemable Noncontrolling Interests (Tables) |
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Oct. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity and Redeemable Noncontrolling Interests [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | 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 28, 2017 and nine months ended October 28, 2017 is as follows (in thousands, except share data):
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Schedule of changes in accumulated other comprehensive income (loss), net of related income taxes | The changes in accumulated other comprehensive income (loss), net of related income taxes, for the three and nine months ended October 28, 2017 and October 29, 2016 are as follows (in thousands):
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Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | Details on reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) during the three and nine months ended October 28, 2017 and October 29, 2016 are as follows (in thousands):
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Accounts Receivable (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accounts receivable | Accounts receivable is summarized as follows (in thousands):
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Inventories (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of inventories | Inventories consist of the following (in thousands):
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Restructuring Charges (Tables) |
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Oct. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Summary of restructuring activities related primarily to severance | The following table summarizes restructuring activities related primarily to severance during the fiscal year ended January 28, 2017 and nine months ended October 28, 2017 (in thousands):
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Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of net revenue and earnings (loss) from operations by segment | Net revenue and earnings (loss) from operations are summarized as follows for the three and nine months ended October 28, 2017 and October 29, 2016 (in thousands):
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Borrowings and Capital Lease Obligations (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of borrowings and capital lease obligations | Borrowings and capital lease obligations are summarized as follows (in thousands):
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Share-Based Compensation (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of share-based compensation expense recognized under all of the Company's stock plans | The following table summarizes the share-based compensation expense recognized under all of the Company’s stock plans during the three and nine months ended October 28, 2017 and October 29, 2016 (in thousands):
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Schedule of activity for nonvested performance-based units | The following table summarizes the activity for nonvested performance-based units during the nine months ended October 28, 2017:
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Schedule of activity for nonvested market-based units | The following table summarizes the activity for nonvested market-based units during the nine months ended October 28, 2017:
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Defined Benefit Plans (Tables) |
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Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of net periodic defined benefit pension cost related to the Company's defined benefit plans | The components of net periodic defined benefit pension cost for the three and nine months ended October 28, 2017 and October 29, 2016 related to the Company’s defined benefit plans are as follows (in thousands):
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of October 28, 2017 and January 28, 2017 (in thousands):
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Derivative Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of fair value of derivative instruments in the condensed consolidated balance sheets | The fair value of derivative instruments in the condensed consolidated balance sheets as of October 28, 2017 and January 28, 2017 is as follows (in thousands):
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Summary of gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) | The following table summarizes the gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) for the three and nine months ended October 28, 2017 and October 29, 2016 (in thousands):
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Summary of net after-tax derivative activity recorded in accumulated other comprehensive income (loss) | The following table summarizes net after-tax derivative activity recorded in accumulated other comprehensive income (loss) (in thousands):
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Summary of gains (losses) before taxes recognized on the derivative instruments not designated as hedging instruments in other income (expense) | The following table summarizes the gains (losses) before taxes recognized on the derivative instruments not designated as hedging instruments in other income and expense for the three and nine months ended October 28, 2017 and October 29, 2016 (in thousands):
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Earnings (Loss) Per Share (Details 2) - USD ($) |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Oct. 28, 2017 |
Apr. 29, 2017 |
Oct. 29, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
Jan. 28, 2017 |
Jun. 26, 2012 |
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Equity, Class of Treasury Stock [Line Items] | |||||||
Shares repurchased, aggregate cost | $ 24,812,000 | $ 3,532,000 | |||||
Share Repurchase Program | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Value of common stock authorized to be repurchased | $ 500,000,000 | ||||||
Number of common stock repurchased (in shares) | 434,772 | 1,485,195 | 0 | 1,919,967 | 0 | ||
Shares repurchased, aggregate cost | $ 7,000,000 | $ 17,800,000 | $ 0 | $ 24,800,000 | $ 0 | ||
Value of common stock remaining to be repurchased | $ 423,500,000 | $ 423,500,000 |
Stockholders' Equity and Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
Jan. 28, 2017 |
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Stockholders' equity reconciliation | |||||
Stock (in shares), beginning of the period | 84,069,492 | ||||
Stockholders' equity, balance at the beginning of the period | $ 980,994 | $ 1,031,293 | $ 1,031,293 | ||
Net earnings (loss) | $ (1,662) | $ 9,729 | (7,008) | $ 16,742 | 25,398 |
Foreign currency translation adjustment | 47,770 | (2,632) | |||
Loss on derivative financial instruments designated as cash flow hedges, net of income tax | (11,167) | (1,852) | |||
Other-than-temporary-impairment and unrealized loss on marketable securities, net of income tax | 15 | ||||
Actuarial valuation loss and related amortization, prior service credit amortization and foreign currency and other adjustments on defined benefit plans, net of income tax | 264 | (923) | |||
Issuance of common stock under stock compensation plans, net of tax effect | (483) | (3,813) | |||
Issuance of stock under Employee Stock Purchase Plan | 401 | 558 | |||
Share-based compensation | 12,410 | 16,908 | |||
Dividends | (56,928) | (76,997) | |||
Share repurchases | (24,812) | (3,532) | |||
Purchase of redeemable noncontrolling interest | 0 | ||||
Noncontrolling interest capital contribution | 11 | 0 | |||
Noncontrolling interest capital distribution | $ (1,358) | (2,759) | |||
Redeemable noncontrolling interest redemption value adjustment | $ (670) | ||||
Stock (in shares), end of the period | 82,843,115 | 82,843,115 | 84,069,492 | ||
Stockholders' equity, balance at the end of the period | $ 940,094 | $ 940,094 | $ 980,994 | ||
Comprehensive income (loss), income tax effect | |||||
Loss on derivative financial instruments designated as cash flow hedges, tax effect | 1,532 | 864 | |||
Other-than-temporary-impairment and unrealized loss on marketable securities, tax effect | (6) | ||||
Actuarial valuation loss and related amortization, prior service credit amortization and foreign currency and other adjustments on defined benefit plans, tax effect | $ (62) | $ 21 | |||
Common Stock | |||||
Stockholders' equity reconciliation | |||||
Stock (in shares), beginning of the period | 84,069,492 | 83,833,937 | 83,833,937 | ||
Issuance of common stock under stock compensation plans (in shares) | 651,052 | 481,037 | |||
Issuance of stock under Employee Stock Purchase Plan (in shares) | 42,538 | 44,486 | |||
Share repurchases (in shares) | (1,919,967) | (289,968) | |||
Stock (in shares), end of the period | 82,843,115 | 82,843,115 | 84,069,492 | ||
Treasury Stock | |||||
Stockholders' equity reconciliation | |||||
Stock (in shares), beginning of the period | 56,440,482 | 56,195,000 | 56,195,000 | ||
Issuance of stock under Employee Stock Purchase Plan (in shares) | (42,538) | (44,486) | |||
Share repurchases (in shares) | 1,919,967 | 289,968 | |||
Stock (in shares), end of the period | 58,317,911 | 58,317,911 | 56,440,482 | ||
Guess, Inc. Stockholders’ Equity | |||||
Stockholders' equity reconciliation | |||||
Stockholders' equity, balance at the beginning of the period | $ 969,222 | $ 1,018,475 | $ 1,018,475 | ||
Net earnings (loss) | (8,934) | 22,761 | |||
Foreign currency translation adjustment | 46,368 | (575) | |||
Loss on derivative financial instruments designated as cash flow hedges, net of income tax | (11,167) | (1,852) | |||
Other-than-temporary-impairment and unrealized loss on marketable securities, net of income tax | 15 | ||||
Actuarial valuation loss and related amortization, prior service credit amortization and foreign currency and other adjustments on defined benefit plans, net of income tax | 264 | (923) | |||
Issuance of common stock under stock compensation plans, net of tax effect | (483) | (3,813) | |||
Issuance of stock under Employee Stock Purchase Plan | 401 | 558 | |||
Share-based compensation | 12,410 | 16,908 | |||
Dividends | (56,928) | (76,997) | |||
Share repurchases | (24,812) | (3,532) | |||
Purchase of redeemable noncontrolling interest | (1,133) | ||||
Noncontrolling interest capital contribution | 0 | 0 | |||
Noncontrolling interest capital distribution | 0 | 0 | |||
Redeemable noncontrolling interest redemption value adjustment | (670) | ||||
Stockholders' equity, balance at the end of the period | $ 926,341 | 926,341 | 969,222 | ||
Nonredeemable Noncontrolling Interests | |||||
Stockholders' equity reconciliation | |||||
Stockholders' equity, balance at the beginning of the period | 11,772 | $ 12,818 | 12,818 | ||
Net earnings (loss) | 1,926 | 2,637 | |||
Foreign currency translation adjustment | 1,402 | (2,057) | |||
Loss on derivative financial instruments designated as cash flow hedges, net of income tax | 0 | 0 | |||
Other-than-temporary-impairment and unrealized loss on marketable securities, net of income tax | 0 | ||||
Actuarial valuation loss and related amortization, prior service credit amortization and foreign currency and other adjustments on defined benefit plans, net of income tax | 0 | 0 | |||
Issuance of common stock under stock compensation plans, net of tax effect | 0 | 0 | |||
Issuance of stock under Employee Stock Purchase Plan | 0 | 0 | |||
Share-based compensation | 0 | 0 | |||
Dividends | 0 | 0 | |||
Share repurchases | 0 | 0 | |||
Purchase of redeemable noncontrolling interest | 1,133 | ||||
Noncontrolling interest capital contribution | 11 | 0 | |||
Noncontrolling interest capital distribution | (1,358) | (2,759) | |||
Redeemable noncontrolling interest redemption value adjustment | 0 | ||||
Stockholders' equity, balance at the end of the period | $ 13,753 | $ 13,753 | $ 11,772 |
Stockholders' Equity and Redeemable Noncontrolling Interests (Details 2) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Oct. 28, 2017 |
Jan. 30, 2016 |
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Redeemable noncontrolling interests reconciliation | ||||||
Redeemable noncontrolling interests, carrying value at the beginning of the period | $ 4,452 | $ 5,252 | $ 5,252 | |||
Foreign currency translation adjustment | 72 | 818 | ||||
Purchase of redeemable noncontrolling interest | (4,445) | |||||
Redeemable noncontrolling interest capital contribution | 951 | 2,157 | ||||
Redeemable noncontrolling interest redemption value adjustment | 670 | |||||
Redeemable noncontrolling interests, carrying value at the end of the period | 5,475 | 4,452 | $ 5,252 | |||
Redeemable noncontrolling interests put arrangements | ||||||
Redeemable noncontrolling interests | 4,452 | 5,252 | 5,252 | $ 5,252 | $ 5,475 | $ 5,252 |
Purchase of redeemable noncontrolling interest | 0 | $ 4,445 | ||||
Guess Brazil | ||||||
Redeemable noncontrolling interests reconciliation | ||||||
Redeemable noncontrolling interests, carrying value at the beginning of the period | 1,700 | |||||
Redeemable noncontrolling interests, carrying value at the end of the period | $ 1,600 | 1,700 | ||||
Redeemable noncontrolling interests put arrangements | ||||||
Total outstanding equity interest in subsidiary covered by put arrangement (as a percent) | 40.00% | |||||
Period put option can be exercised by noncontrolling interest holder after initial and subsequent exercise periods, subject to certain time restrictions (by year) | 3 years | |||||
Initial period put option can be exercised by noncontrolling interest holder after commencement of agreement, subject to certain time restrictions (by year) | 6 years | |||||
Total cash contributions in the joint venture made by the Company and the noncontrolling interest holder | 1,700 | |||||
Payments made by the Company related to its controlling interest in joint venture | 1,000 | |||||
Redeemable noncontrolling interests | $ 1,700 | 1,700 | $ 1,600 | |||
Guess CIS | ||||||
Redeemable noncontrolling interests reconciliation | ||||||
Redeemable noncontrolling interests, carrying value at the beginning of the period | 2,800 | |||||
Redeemable noncontrolling interests, carrying value at the end of the period | $ 3,900 | 2,800 | ||||
Redeemable noncontrolling interests put arrangements | ||||||
Total outstanding equity interest in subsidiary covered by put arrangement (as a percent) | 30.00% | |||||
Initial period put option can be exercised by noncontrolling interest holder after commencement of agreement, subject to certain time restrictions (by year) | 5 years | |||||
Total cash contributions in the joint venture made by the Company and the noncontrolling interest holder | $ 3,200 | 5,000 | ||||
Payments made by the Company related to its controlling interest in joint venture | 2,200 | 3,500 | ||||
Redeemable noncontrolling interests | $ 2,800 | $ 2,800 | $ 3,900 | |||
Last date put option can be exercised by noncontrolling interest holder | Dec. 31, 2025 | |||||
Guess Sud | ||||||
Redeemable noncontrolling interests put arrangements | ||||||
Total outstanding equity interest in subsidiary covered by put arrangement (as a percent) | 40.00% | |||||
Initial date put option can be exercised by noncontrolling interest holders | Jan. 30, 2012 | |||||
Remaining interest acquired by the Company from the noncontrolling interest holder (as a percent) | 40.00% | |||||
Purchase of redeemable noncontrolling interest | $ 4,445 |
Stockholders' Equity and Redeemable Noncontrolling Interests (Details 3) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
|
Accumulated other comprehensive income (loss), net of tax | ||||
Beginning balance | $ (120,909) | $ (137,214) | $ (161,389) | $ (158,054) |
Gains (losses) arising during the period | (5,338) | (9,253) | 36,150 | 13,494 |
Reclassifications to net earnings (loss) for (gains) losses realized | 323 | (516) | (685) | (2,423) |
Net other comprehensive income (loss) | (5,015) | (9,769) | 35,465 | 11,071 |
Ending balance | (125,924) | (146,983) | (125,924) | (146,983) |
Foreign Currency Translation Adjustment | ||||
Accumulated other comprehensive income (loss), net of tax | ||||
Beginning balance | (103,675) | (129,518) | (158,227) | (157,652) |
Gains (losses) arising during the period | (8,184) | (12,600) | 46,368 | 15,534 |
Reclassifications to net earnings (loss) for (gains) losses realized | 0 | 0 | 0 | 0 |
Net other comprehensive income (loss) | (8,184) | (12,600) | 46,368 | 15,534 |
Ending balance | (111,859) | (142,118) | (111,859) | (142,118) |
Derivative Financial Instruments Designated as Cash Flow Hedges | ||||
Accumulated other comprehensive income (loss), net of tax | ||||
Beginning balance | (8,751) | (37) | 5,400 | 7,252 |
Gains (losses) arising during the period | 2,749 | 3,305 | (10,220) | (1,958) |
Reclassifications to net earnings (loss) for (gains) losses realized | 235 | (593) | (947) | (2,619) |
Net other comprehensive income (loss) | 2,984 | 2,712 | (11,167) | (4,577) |
Ending balance | (5,767) | 2,675 | (5,767) | 2,675 |
Marketable Securities | ||||
Accumulated other comprehensive income (loss), net of tax | ||||
Beginning balance | (16) | (15) | ||
Gains (losses) arising during the period | 0 | (1) | ||
Reclassifications to net earnings (loss) for (gains) losses realized | 16 | 16 | ||
Net other comprehensive income (loss) | 16 | 15 | ||
Ending balance | 0 | 0 | ||
Defined Benefit Plans | ||||
Accumulated other comprehensive income (loss), net of tax | ||||
Beginning balance | (8,483) | (7,643) | (8,562) | (7,639) |
Gains (losses) arising during the period | 97 | 42 | 2 | (81) |
Reclassifications to net earnings (loss) for (gains) losses realized | 88 | 61 | 262 | 180 |
Net other comprehensive income (loss) | 185 | 103 | 264 | 99 |
Ending balance | $ (8,298) | $ (7,540) | $ (8,298) | $ (7,540) |
Stockholders' Equity and Redeemable Noncontrolling Interests (Details 4) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
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Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | |||||||
Cost of product sales | $ 363,029 | $ 356,079 | $ 1,052,633 | $ 1,021,462 | |||
Other income/expense | (2,759) | (125) | (3,561) | (26,417) | |||
Interest expense | 684 | 500 | 1,642 | 1,478 | |||
Income tax expense | 3,673 | 5,880 | 8,723 | 11,682 | |||
Net earnings (loss) attributable to Guess, Inc. | 2,860 | (9,103) | 8,934 | (16,194) | |||
Reclassifications to net earnings (loss) for (gains) losses realized | 323 | (516) | (685) | (2,423) | |||
Reclassifications out of accumulated other comprehensive income (loss) | |||||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | |||||||
Net earnings (loss) attributable to Guess, Inc. | 323 | (516) | (685) | (2,423) | |||
Derivative Financial Instruments Designated as Cash Flow Hedges | |||||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | |||||||
Reclassifications to net earnings (loss) for (gains) losses realized | 235 | (593) | (947) | (2,619) | |||
Derivative Financial Instruments Designated as Cash Flow Hedges | Reclassifications out of accumulated other comprehensive income (loss) | |||||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | |||||||
Cost of product sales | (81) | (739) | (1,360) | (3,315) | |||
Other income/expense | 337 | (45) | 244 | (126) | |||
Interest expense | 57 | 57 | 119 | 167 | |||
Income tax expense | (78) | 134 | 50 | 655 | |||
Net earnings (loss) attributable to Guess, Inc. | 235 | (593) | (947) | (2,619) | |||
Marketable Securities | |||||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | |||||||
Reclassifications to net earnings (loss) for (gains) losses realized | 16 | 16 | |||||
Marketable Securities | Reclassifications out of accumulated other comprehensive income (loss) | |||||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | |||||||
Other income/expense | 0 | 25 | 0 | 25 | |||
Income tax expense | 0 | (9) | 0 | (9) | |||
Net earnings (loss) attributable to Guess, Inc. | 0 | 16 | 0 | 16 | |||
Actuarial Loss Amortization | |||||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | |||||||
Reclassifications out of AOCI related to defined benefit plans | [1] | 116 | 86 | 344 | 257 | ||
Prior Service Credit Amortization | |||||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | |||||||
Reclassifications out of AOCI related to defined benefit plans | [1] | (7) | (7) | (20) | (21) | ||
Defined Benefit Plans | |||||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) | |||||||
Income tax expense | (21) | (18) | (62) | (56) | |||
Reclassifications to net earnings (loss) for (gains) losses realized | $ 88 | $ 61 | $ 262 | $ 180 | |||
|
Accounts Receivable (Details) - USD ($) $ in Thousands |
Oct. 28, 2017 |
Jan. 28, 2017 |
---|---|---|
Accounts receivable | ||
Accounts receivable, gross | $ 276,291 | $ 260,459 |
Less allowances | 39,632 | 34,922 |
Accounts receivable, net | 236,659 | 225,537 |
Trade receivables | ||
Accounts receivable | ||
Accounts receivable, gross | 241,776 | 234,690 |
Royalty receivables | ||
Accounts receivable | ||
Accounts receivable, gross | 22,970 | 19,881 |
Other receivables | ||
Accounts receivable | ||
Accounts receivable, gross | $ 11,545 | $ 5,888 |
Inventories (Details) - USD ($) $ in Thousands |
Oct. 28, 2017 |
Jan. 28, 2017 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 509 | $ 799 |
Work in progress | 0 | 78 |
Finished goods | 476,668 | 366,504 |
Inventories | 477,177 | 367,381 |
Allowance to write down inventories to the lower of cost or net realizable value | $ 26,900 | $ 19,400 |
Restructuring Charges (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
Apr. 30, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
Jan. 28, 2017 |
|
Restructuring reserve activity | ||||||
Charges to operations | $ 0 | $ 0 | $ 0 | $ 6,083 | ||
Severance | ||||||
Restructuring reserve activity | ||||||
Beginning balance | $ 0 | 180 | 0 | $ 0 | ||
Charges to operations | 0 | 6,083 | 0 | 6,083 | 6,083 | |
Cash payments | (124) | (6,003) | ||||
Foreign currency and other adjustments | (56) | 100 | ||||
Ending balance | 0 | 0 | 180 | |||
Accrued expenses | Severance | ||||||
Restructuring activity | ||||||
Restructuring reserve included in accrued expenses | $ 0 | $ 0 | $ 180 | |||
Europe | ||||||
Restructuring activity | ||||||
Estimated exit tax charge | $ 1,900 | $ 1,900 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
Jan. 28, 2017 |
|
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate (as a percent) | 508.60% | 41.10% | |||
Aggregate accruals for uncertain tax positions, including penalties and interest | $ 15,300 | $ 15,300 | $ 14,600 | ||
New accounting pronouncements and changes in accounting principles | |||||
Increase to income tax expense from tax shortfalls | $ 3,673 | $ 5,880 | 8,723 | $ 11,682 | |
Accounting Standards Update 2016-09 | |||||
New accounting pronouncements and changes in accounting principles | |||||
Increase to income tax expense from tax shortfalls | $ 700 |
Segment Information (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 28, 2017
USD ($)
|
Oct. 29, 2016
USD ($)
|
Oct. 28, 2017
USD ($)
segment
|
Oct. 29, 2016
USD ($)
|
||||||||||
Segment information of net revenue and earnings (loss) from operations | |||||||||||||
Number of reportable segments | segment | 5 | ||||||||||||
Net revenue | $ 554,138 | $ 536,321 | $ 1,586,411 | $ 1,530,095 | |||||||||
Licensing | 25,929 | 23,768 | 68,088 | 68,066 | |||||||||
Net (gains) losses on lease terminations | 11,494 | 0 | 11,494 | (695) | |||||||||
Asset impairment charges | (2,018) | (802) | (6,013) | (1,457) | |||||||||
Restructuring charges | 0 | 0 | 0 | (6,083) | |||||||||
Earnings (loss) from operations | (955) | 15,123 | (3,226) | 1,722 | |||||||||
Corporate overhead | |||||||||||||
Segment information of net revenue and earnings (loss) from operations | |||||||||||||
Earnings (loss) from operations | [1] | (23,942) | (11,466) | (68,899) | (58,660) | ||||||||
Reconciling items | |||||||||||||
Segment information of net revenue and earnings (loss) from operations | |||||||||||||
Net (gains) losses on lease terminations | [1],[2] | 11,494 | 0 | 11,494 | (695) | ||||||||
Asset impairment charges | [1],[3] | (2,018) | (802) | (6,013) | (1,457) | ||||||||
Restructuring charges | [4] | 0 | 0 | 0 | (6,083) | ||||||||
Americas Retail | |||||||||||||
Segment information of net revenue and earnings (loss) from operations | |||||||||||||
Net revenue | 187,021 | 215,862 | 561,903 | 646,573 | |||||||||
Earnings (loss) from operations | [1] | (4,670) | (10,505) | (33,654) | (22,279) | ||||||||
Europe | |||||||||||||
Segment information of net revenue and earnings (loss) from operations | |||||||||||||
Net revenue | [1] | 221,230 | 186,289 | 641,833 | 532,847 | ||||||||
Earnings (loss) from operations | [1] | 6,678 | 11,597 | 30,749 | 16,221 | ||||||||
Asia | |||||||||||||
Segment information of net revenue and earnings (loss) from operations | |||||||||||||
Net revenue | [1] | 74,322 | 63,617 | 200,436 | 171,255 | ||||||||
Earnings (loss) from operations | [1] | 2,718 | (1,962) | 5,055 | (5,251) | ||||||||
Americas Wholesale | |||||||||||||
Segment information of net revenue and earnings (loss) from operations | |||||||||||||
Net revenue | [1] | 45,636 | 46,785 | 114,151 | 111,354 | ||||||||
Earnings (loss) from operations | [1] | 8,241 | 8,142 | 20,011 | 18,211 | ||||||||
Licensing | |||||||||||||
Segment information of net revenue and earnings (loss) from operations | |||||||||||||
Licensing | 25,929 | 23,768 | 68,088 | 68,066 | |||||||||
Earnings (loss) from operations | [1] | 23,532 | 20,119 | 61,019 | 60,325 | ||||||||
Operating Segments | |||||||||||||
Segment information of net revenue and earnings (loss) from operations | |||||||||||||
Earnings (loss) from operations | $ 36,499 | $ 27,391 | $ 83,180 | $ 67,227 | |||||||||
|
Borrowings and Capital Lease Obligations (Details) |
9 Months Ended | ||||||
---|---|---|---|---|---|---|---|
May 01, 2016 |
Feb. 16, 2016
USD ($)
|
Feb. 01, 2016 |
Jun. 23, 2015
USD ($)
|
Oct. 28, 2017
USD ($)
facility
|
Oct. 29, 2016
USD ($)
|
Jan. 28, 2017
USD ($)
|
|
Borrowings and capital lease obligations | |||||||
Mortgage debt, maturing monthly through January 2026 | $ 20,465,000 | $ 20,889,000 | |||||
Capital lease obligations | 17,325,000 | 0 | |||||
Other | 3,112,000 | 3,159,000 | |||||
Total debt and capital lease obligations | 40,902,000 | 24,048,000 | |||||
Less current installments | 2,121,000 | 566,000 | |||||
Long-term debt and capital lease obligations | 38,781,000 | 23,482,000 | |||||
Mortgage Debt | |||||||
Mortgage debt, maturing monthly through January 2026 | 20,465,000 | 20,889,000 | |||||
Capital Lease | |||||||
Capital lease obligations incurred | 18,042,000 | $ 0 | |||||
Capital lease obligations | $ 17,325,000 | 0 | |||||
Interest rate swap | Derivatives designated as hedging instruments | Cash flow hedges | |||||||
Borrowings and capital lease obligations | |||||||
Fixed rate of interest rate swap derivative (as a percent) | 3.06% | ||||||
Interest rate swap maturity date | Jan. 31, 2026 | ||||||
Europe | Foreign line of credit | |||||||
Credit Facilities | |||||||
Current borrowing capacity | $ 69,200,000 | ||||||
Credit Facility, outstanding amount | $ 0 | ||||||
Number of credit facilities subject to minimum net equity requirement | facility | 1 | ||||||
Maximum borrowing capacity of the credit facility which is subject to a minimum net equity requirement | $ 40,600,000 | ||||||
Europe | Foreign line of credit | Minimum | |||||||
Credit Facilities | |||||||
Interest rate (as a percent) | 0.50% | ||||||
Europe | Foreign line of credit | Maximum | |||||||
Credit Facilities | |||||||
Interest rate (as a percent) | 4.60% | ||||||
Europe | Documentary letters of credit | Foreign line of credit | |||||||
Credit Facilities | |||||||
Letters of credit outstanding | $ 0 | ||||||
Equipment | |||||||
Capital Lease | |||||||
Lease expiration date | Aug. 31, 2022 | ||||||
Mortgage debt | Building | U.S. | |||||||
Borrowings and capital lease obligations | |||||||
Mortgage debt, maturing monthly through January 2026 | $ 21,500,000.0 | $ 20,465,000 | 20,889,000 | ||||
Debt maturity period (in years) | 10 years | ||||||
Mortgage Debt | |||||||
Debt maturity date | Jan. 31, 2026 | ||||||
Mortgage debt, maturing monthly through January 2026 | $ 21,500,000.0 | $ 20,465,000 | 20,889,000 | ||||
Security description for mortgage debt | secured by the Company’s U.S. distribution center based in Louisville, Kentucky | ||||||
Debt amortization period (in years) | 25 years | ||||||
Debt issuance costs | $ 100,000 | 100,000 | |||||
Mortgage debt | Building | U.S. | LIBOR | |||||||
Borrowings and capital lease obligations | |||||||
Interest rate margin (as a percent) | 1.50% | ||||||
Mortgage debt | Building | U.S. | Interest rate swap | |||||||
Mortgage Debt | |||||||
Fair value of cash flow hedge interest rate swap asset | $ 812,000 | $ 876,000 | |||||
Mortgage debt | Building | U.S. | Interest rate swap | Derivatives designated as hedging instruments | Cash flow hedges | |||||||
Borrowings and capital lease obligations | |||||||
Fixed rate of interest rate swap derivative (as a percent) | 3.06% | 3.06% | |||||
Interest rate swap maturity date | Jan. 31, 2026 | ||||||
Capital lease | Building | Italy | |||||||
Capital Lease | |||||||
Lease expiration date | May 01, 2016 | ||||||
Capital lease | Building | Italy | Interest rate swap | Derivatives not designated as hedging instruments | |||||||
Borrowings and capital lease obligations | |||||||
Fixed rate of interest rate swap derivative (as a percent) | 3.55% | ||||||
Interest rate swap maturity date | Feb. 01, 2016 | ||||||
Capital lease | Equipment | Netherlands | |||||||
Borrowings and capital lease obligations | |||||||
Capital lease obligations | $ 15,900,000 | ||||||
Capital Lease | |||||||
Capital lease obligations incurred | $ 16,500,000 | ||||||
Lease expiration date | May 31, 2027 | ||||||
Effective interest rate on capital lease obligations | 6.00% | ||||||
Capital lease obligations | $ 15,900,000 | ||||||
Capital lease | Computer hardware and software | |||||||
Borrowings and capital lease obligations | |||||||
Capital lease obligations | 1,400,000 | ||||||
Capital Lease | |||||||
Capital lease obligations incurred | 1,500,000 | ||||||
Capital lease obligations | 1,400,000 | ||||||
Credit Facility | |||||||
Credit Facilities | |||||||
Credit Facility, outstanding amount | $ 0 | ||||||
Percentage of borrowings exceeding borrowing base that require the Company to comply with a fixed charge coverage ratio on a trailing four-quarter basis | 80.00% | ||||||
Credit Facility | Revolving Credit Facility | |||||||
Borrowings and capital lease obligations | |||||||
Debt maturity period (in years) | 5 years | ||||||
Credit Facilities | |||||||
Maximum borrowing capacity | $ 150,000,000 | $ 150,000,000 | |||||
Current borrowing capacity | $ 123,000,000 | ||||||
Priority level for Credit Facility | secured by a first priority lien on substantially all of the assets of the Company and such domestic and Canadian subsidiaries | ||||||
Credit Facility | Accordion feature | |||||||
Credit Facilities | |||||||
Maximum borrowing capacity | 150,000,000 | $ 150,000,000 | |||||
Credit Facility | U.S. line of credit | Base rate | Minimum | |||||||
Borrowings and capital lease obligations | |||||||
Interest rate margin (as a percent) | 0.25% | ||||||
Credit Facility | U.S. line of credit | Base rate | Maximum | |||||||
Borrowings and capital lease obligations | |||||||
Interest rate margin (as a percent) | 0.75% | ||||||
Credit Facility | U.S. line of credit | LIBOR | |||||||
Credit Facilities | |||||||
Interest rate margin added to respective base rate | 1.00% | ||||||
Credit Facility | U.S. line of credit | LIBOR | Minimum | |||||||
Borrowings and capital lease obligations | |||||||
Interest rate margin (as a percent) | 1.25% | ||||||
Credit Facility | U.S. line of credit | LIBOR | Maximum | |||||||
Borrowings and capital lease obligations | |||||||
Interest rate margin (as a percent) | 1.75% | ||||||
Credit Facility | U.S. line of credit | Federal funds rate | |||||||
Credit Facilities | |||||||
Interest rate margin added to respective base rate | 0.50% | ||||||
Credit Facility | Standby letters of credit | |||||||
Credit Facilities | |||||||
Letters of credit outstanding | $ 1,000,000 | ||||||
Credit Facility | Documentary letters of credit | |||||||
Credit Facilities | |||||||
Letters of credit outstanding | 0 | ||||||
Credit Facility | Canada | Foreign line of credit | |||||||
Credit Facilities | |||||||
Maximum borrowing capacity | $ 50,000,000 | $ 50,000,000 | |||||
Credit Facility | Canada | Foreign line of credit | Prime rate | Minimum | |||||||
Borrowings and capital lease obligations | |||||||
Interest rate margin (as a percent) | 0.25% | ||||||
Credit Facility | Canada | Foreign line of credit | Prime rate | Maximum | |||||||
Borrowings and capital lease obligations | |||||||
Interest rate margin (as a percent) | 0.75% | ||||||
Credit Facility | Canada | Foreign line of credit | Canadian BA rate | |||||||
Credit Facilities | |||||||
Interest rate margin added to respective base rate | 1.00% | ||||||
Credit Facility | Canada | Foreign line of credit | Canadian BA rate | Minimum | |||||||
Borrowings and capital lease obligations | |||||||
Interest rate margin (as a percent) | 1.25% | ||||||
Credit Facility | Canada | Foreign line of credit | Canadian BA rate | Maximum | |||||||
Borrowings and capital lease obligations | |||||||
Interest rate margin (as a percent) | 1.75% | ||||||
Credit Facility | Canada | Foreign line of credit | Bank of Canada overnight rate | |||||||
Credit Facilities | |||||||
Interest rate margin added to respective base rate | 0.50% |
Share-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Apr. 28, 2017 |
Mar. 29, 2017 |
Apr. 29, 2016 |
Mar. 30, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
Jan. 29, 2017 |
|
Disclosure of share-based compensation information under stock plans | |||||||||
Share-based compensation expense | $ 4,260 | $ 3,719 | $ 12,410 | $ 12,768 | |||||
Share-Based Compensation, Additional Disclosures | |||||||||
Unrecognized compensation cost related to nonvested stock options | 4,300 | $ 4,300 | |||||||
Weighted average fair values of stock options granted during the period (in dollars per share) | $ 1.57 | $ 3.53 | |||||||
Granted (in shares) | 1,283,175 | 616,450 | |||||||
Accounting Standards Update 2016-09 | |||||||||
Share-Based Compensation, Additional Disclosures | |||||||||
Cumulative adjustment to reduce retained earnings as a result of adoption of guidance which allows entities to account for forfeitures as they occur | $ 300 | ||||||||
Employee Stock Purchase Plan | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Share-based compensation expense | 31 | 23 | $ 110 | $ 114 | |||||
Stock options | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Share-based compensation expense | 571 | 520 | $ 1,761 | 1,654 | |||||
Share-Based Compensation, Additional Disclosures | |||||||||
Weighted average period for recognition of unrecognized compensation cost (in years/months/days) | 1 year 8 months 10 days | ||||||||
Stock awards or units | |||||||||
Disclosure of share-based compensation information under stock plans | |||||||||
Share-based compensation expense | 3,658 | $ 3,176 | $ 10,539 | $ 11,000 | |||||
Share-Based Compensation, Additional Disclosures | |||||||||
Unrecognized compensation cost related to nonvested stock awards/units | $ 33,400 | $ 33,400 | |||||||
Weighted average period for recognition of unrecognized compensation cost (in years/months/days) | 1 year 8 months 10 days | ||||||||
Number of Units | |||||||||
Granted (in shares) | 707,675 | 442,000 | |||||||
Performance-based or market-based units | |||||||||
Number of Units | |||||||||
Granted (in shares) | 1,056,042 | 602,816 | |||||||
Performance-based units | |||||||||
Number of Units | |||||||||
Nonvested at the beginning of the period (in shares) | 787,849 | ||||||||
Granted (in shares) | 818,416 | ||||||||
Vested (in shares) | (193,240) | ||||||||
Forfeited (in shares) | (6,757) | ||||||||
Nonvested at the end of the period (in shares) | 1,406,268 | 1,406,268 | |||||||
Weighted Average Grant Date Fair Value | |||||||||
Nonvested at the beginning of the period (in dollars per share) | $ 19.17 | ||||||||
Granted (in dollars per share) | 11.17 | ||||||||
Vested (in dollars per share) | 20.57 | ||||||||
Forfeited (in dollars per share) | 18.35 | ||||||||
Nonvested at the end of the period (in dollars per share) | $ 14.32 | $ 14.32 | |||||||
Performance units | Vesting, Tranche One | |||||||||
Share-Based Compensation, Additional Disclosures | |||||||||
Vesting period (in years) | 1 year | ||||||||
Performance units | Vesting, annual vesting periods after initial vesting period | Minimum | |||||||||
Share-Based Compensation, Additional Disclosures | |||||||||
Vesting period (in years) | 2 years | ||||||||
Performance units | Vesting, annual vesting periods after initial vesting period | Maximum | |||||||||
Share-Based Compensation, Additional Disclosures | |||||||||
Vesting period (in years) | 3 years | ||||||||
Target performance units | |||||||||
Share-Based Compensation, Additional Disclosures | |||||||||
Vesting period (in years) | 3 years | ||||||||
Target performance units | Minimum | |||||||||
Share-Based Compensation, Additional Disclosures | |||||||||
Vesting rights based on the satisfaction of certain performance or market-based criteria (as a percentage) | 0.00% | ||||||||
Target performance units | Maximum | |||||||||
Share-Based Compensation, Additional Disclosures | |||||||||
Vesting rights based on the satisfaction of certain performance or market-based criteria (as a percentage) | 200.00% | ||||||||
Market-based units | |||||||||
Share-Based Compensation, Additional Disclosures | |||||||||
Vesting period (in years) | 3 years | ||||||||
Period which award is subject to a market condition (in years) | 3 years | ||||||||
Number of Units | |||||||||
Nonvested at the beginning of the period (in shares) | 323,825 | ||||||||
Granted (in shares) | 248,020 | ||||||||
Vested (in shares) | 0 | ||||||||
Forfeited (in shares) | 0 | ||||||||
Nonvested at the end of the period (in shares) | 571,845 | 571,845 | |||||||
Weighted Average Grant Date Fair Value | |||||||||
Nonvested at the beginning of the period (in dollars per share) | $ 16.63 | ||||||||
Granted (in dollars per share) | 10.62 | ||||||||
Vested (in dollars per share) | 0.00 | ||||||||
Forfeited (in dollars per share) | 0.00 | ||||||||
Nonvested at the end of the period (in dollars per share) | $ 14.02 | $ 14.02 | |||||||
Market-based units | Minimum | |||||||||
Share-Based Compensation, Additional Disclosures | |||||||||
Vesting rights based on the satisfaction of certain performance or market-based criteria (as a percentage) | 0.00% | ||||||||
Market-based units | Maximum | |||||||||
Share-Based Compensation, Additional Disclosures | |||||||||
Vesting rights based on the satisfaction of certain performance or market-based criteria (as a percentage) | 150.00% |
Related Party Transactions (Details) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 28, 2017
ft²
lease
|
Oct. 28, 2017
USD ($)
ft²
lease
|
Oct. 29, 2016
USD ($)
|
Jan. 30, 2016
USD ($)
ft²
|
|
Marciano Trusts | ||||
Related Party Transactions | ||||
Number of leases under related party lease agreements | lease | 4 | 4 | ||
Earliest lease expiration date (by year) | 2018 | |||
Latest lease expiration date (by year) | 2020 | |||
Marciano Trusts | Parking lot adjacent to corporate headquarters | ||||
Related Party Transactions | ||||
Area of leased property (in square feet) | ft² | 140,000 | |||
Sale price of sales-leaseback transaction | $ 7.5 | |||
Cash proceeds received from sales-leaseback transaction | $ 7.5 | |||
Marciano Trusts | Canada | ||||
Related Party Transactions | ||||
Renewal term | 1 year | |||
Lease expiration date | Dec. 31, 2018 | |||
Marciano Trusts | France | ||||
Related Party Transactions | ||||
Reduction in square footage | ft² | 5,100 | 5,100 | ||
Area of leased property (in square feet) | ft² | 16,000 | 16,000 | ||
Marciano Trusts | Related party leases | ||||
Related Party Transactions | ||||
Expenses under related party arrangement | $ 3.6 | 3.8 | ||
MPM Financial LLC | Payments for aircraft charter | ||||
Related Party Transactions | ||||
Payments under related party agreement | $ 0.7 | $ 0.8 |
Commitments and Contingencies (Details) |
9 Months Ended |
---|---|
Oct. 28, 2017 | |
Property leases | |
Leases | |
Lease expiration date | Nov. 30, 2036 |
Retail store leases | Minimum | |
Leases | |
Percentage of annual sales volume used for incremental rent on certain retail location leases | 4.00% |
Retail store leases | Maximum | |
Leases | |
Percentage of annual sales volume used for incremental rent on certain retail location leases | 20.00% |
Retail concession leases | Average | |
Leases | |
Percentage of annual sales volume used for incremental rent on certain retail location leases | 35.00% |
Equipment operating leases | |
Leases | |
Lease expiration date | Aug. 31, 2022 |
Commitments and Contingencies (Details 2) - Oct. 28, 2017 € in Millions, $ in Millions |
USD ($) |
EUR (€) |
---|---|---|
Private equity fund | ||
Investment commitments | ||
Unfunded commitment to invest in private equity fund | $ 5.3 | € 4.5 |
Commitments and Contingencies (Details 3) $ in Thousands, € in Millions |
1 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Nov. 08, 2013
USD ($)
|
Jul. 19, 2012
USD ($)
|
May 31, 2015
USD ($)
|
May 31, 2015
EUR (€)
|
Oct. 28, 2017
USD ($)
subsidiary
|
Jan. 28, 2017
USD ($)
|
Jan. 28, 2017
EUR (€)
|
Oct. 28, 2017
EUR (€)
|
Jan. 30, 2015
trademark
|
May 02, 2013
trademark
|
|
Italy | Europe | Customs tax audit and appeals | ||||||||||
Loss contingency | ||||||||||
Number of subsidiaries under audit by the Italian Customs Agency | subsidiary | 1 | |||||||||
Earliest period under audit by Italian Customs Agency | Jul. 01, 2010 | |||||||||
Latest period under audit by Italian Customs Agency | Dec. 31, 2012 | |||||||||
Customs tax assessments including potential penalties and interest | $ 11,400 | € 9.8 | ||||||||
Italy | First set of appeals | Europe | Customs tax audit and appeals | ||||||||||
Loss contingency | ||||||||||
Earliest period covering canceled assessments | Jul. 01, 2010 | Jul. 01, 2010 | ||||||||
Latest period covering canceled assessments | Sep. 30, 2010 | Sep. 30, 2010 | ||||||||
Canceled customs tax assessments | $ 1,900 | € 1.7 | ||||||||
Italy | Second through seventh set of appeals | Europe | Customs tax audit and appeals | ||||||||||
Loss contingency | ||||||||||
Earliest period covering canceled assessments | Oct. 01, 2010 | Oct. 01, 2010 | ||||||||
Latest period covering canceled assessments | Dec. 31, 2012 | Dec. 31, 2012 | ||||||||
Canceled customs tax assessments | $ 9,500 | € 8.1 | ||||||||
Judicial ruling | U.S. | Gucci America, Inc. | ||||||||||
Loss contingency | ||||||||||
Damages sought in litigation case | $ 26,000 | |||||||||
Accounting profits sought by plaintiff as compensation | 99,000 | |||||||||
Monetary damages awarded by court | 2,300 | |||||||||
Monetary damages awarded by court to be paid by the Company's licensees | $ 2,300 | |||||||||
Pending litigation | Italy | Gucci America, Inc. | ||||||||||
Loss contingency | ||||||||||
Number of Italian trademark registrations to be cancelled by plaintiff | trademark | 3 | |||||||||
Number of European Community trademark registrations to be cancelled by plaintiff | trademark | 4 | |||||||||
Pending litigation | China | Gucci America, Inc. | ||||||||||
Loss contingency | ||||||||||
Damages sought in litigation case | $ 80 | |||||||||
Pending litigation | France | Gucci America, Inc. | ||||||||||
Loss contingency | ||||||||||
Number of European Community trademark registrations to be cancelled by plaintiff | trademark | 2 | |||||||||
Number of international trademark registrations to be cancelled by plaintiff | trademark | 1 |
Defined Benefit Plans (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
Jan. 28, 2017 |
|
Components of net periodic defined benefit pension cost | |||||
Service cost | $ 492 | $ 381 | $ 1,452 | $ 1,152 | |
Interest cost | 483 | 482 | 1,446 | 1,446 | |
Expected return on plan assets | (48) | (46) | (143) | (139) | |
Net amortization of unrecognized prior service credit | (7) | (7) | (20) | (21) | |
Net amortization of actuarial losses | 116 | 86 | 344 | 257 | |
Net periodic defined benefit pension cost | 1,036 | 896 | 3,079 | 2,695 | |
SERP | |||||
Defined Benefit Plans | |||||
SERP benefit payments | 400 | 400 | 1,300 | 1,300 | |
Components of net periodic defined benefit pension cost | |||||
Service cost | 0 | 0 | 0 | 0 | |
Interest cost | 461 | 460 | 1,382 | 1,380 | |
Expected return on plan assets | 0 | 0 | 0 | 0 | |
Net amortization of unrecognized prior service credit | 0 | 0 | 0 | 0 | |
Net amortization of actuarial losses | 38 | 39 | 114 | 116 | |
Net periodic defined benefit pension cost | 499 | 499 | 1,496 | 1,496 | |
SERP | Other income/expense | |||||
Defined Benefit Plans | |||||
Gains (losses) as a result of changes in value of the insurance policy investments, included in other income and expense | 1,600 | (500) | 5,500 | 4,600 | |
Swiss Pension Plan | Switzerland | |||||
Defined Benefit Plans | |||||
Projected benefit obligation | 18,900 | 18,900 | $ 17,600 | ||
Plan assets at fair value | 15,400 | 15,400 | 14,100 | ||
Components of net periodic defined benefit pension cost | |||||
Service cost | 492 | 381 | 1,452 | 1,152 | |
Interest cost | 22 | 22 | 64 | 66 | |
Expected return on plan assets | (48) | (46) | (143) | (139) | |
Net amortization of unrecognized prior service credit | (7) | (7) | (20) | (21) | |
Net amortization of actuarial losses | 78 | 47 | 230 | 141 | |
Net periodic defined benefit pension cost | 537 | $ 397 | 1,583 | $ 1,199 | |
Other assets | SERP | |||||
Defined Benefit Plans | |||||
Cash surrender values of the insurance policies held in a rabbi trust | 62,800 | 62,800 | 58,600 | ||
Accrued expenses and other long-term liabilities | SERP | |||||
Defined Benefit Plans | |||||
Projected benefit obligation | 53,600 | 53,600 | 53,500 | ||
Other long-term liabilities | Swiss Pension Plan | Switzerland | |||||
Defined Benefit Plans | |||||
Net liability | $ 3,500 | $ 3,500 | $ 3,500 |
Fair Value Measurements (Details) € in Millions |
9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Oct. 28, 2017
USD ($)
|
Oct. 28, 2017
EUR (€)
|
Jan. 28, 2017
USD ($)
|
Oct. 28, 2017
EUR (€)
|
|
Transfers of financial instruments between the three levels of fair value hierarchy | ||||
Value of transfers between levels | $ 0 | $ 0 | ||
Private equity fund | ||||
Investment in private equity fund | ||||
Payments to acquire investment in private equity fund | 500,000 | € 0.5 | ||
Unfunded commitment to invest in private equity fund | 5,300,000 | € 4.5 | ||
Private equity fund | Other assets | ||||
Investment in private equity fund | ||||
Investment in private equity fund | 500,000 | € 0.5 | ||
Assets and liabilities measured at fair value on a recurring basis | ||||
Assets: | ||||
Foreign exchange currency contracts, Assets | 1,820,000 | 9,868,000 | ||
Interest rate swap | 812,000 | 876,000 | ||
Total Assets | 2,632,000 | 10,744,000 | ||
Liabilities: | ||||
Foreign exchange currency contracts, Liabilities | 6,594,000 | 1,424,000 | ||
Deferred compensation obligations | 12,729,000 | 11,184,000 | ||
Total Liabilities | 19,323,000 | 12,608,000 | ||
Assets and liabilities measured at fair value on a recurring basis | Level 1 | ||||
Assets: | ||||
Foreign exchange currency contracts, Assets | 0 | 0 | ||
Interest rate swap | 0 | 0 | ||
Total Assets | 0 | 0 | ||
Liabilities: | ||||
Foreign exchange currency contracts, Liabilities | 0 | 0 | ||
Deferred compensation obligations | 0 | 0 | ||
Total Liabilities | 0 | 0 | ||
Assets and liabilities measured at fair value on a recurring basis | Level 2 | ||||
Assets: | ||||
Foreign exchange currency contracts, Assets | 1,820,000 | 9,868,000 | ||
Interest rate swap | 812,000 | 876,000 | ||
Total Assets | 2,632,000 | 10,744,000 | ||
Liabilities: | ||||
Foreign exchange currency contracts, Liabilities | 6,594,000 | 1,424,000 | ||
Deferred compensation obligations | 12,729,000 | 11,184,000 | ||
Total Liabilities | 19,323,000 | 12,608,000 | ||
Assets and liabilities measured at fair value on a recurring basis | Level 3 | ||||
Assets: | ||||
Foreign exchange currency contracts, Assets | 0 | 0 | ||
Interest rate swap | 0 | 0 | ||
Total Assets | 0 | 0 | ||
Liabilities: | ||||
Foreign exchange currency contracts, Liabilities | 0 | 0 | ||
Deferred compensation obligations | 0 | 0 | ||
Total Liabilities | $ 0 | $ 0 |
Fair Value Measurements (Details 2) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
|
Asset impairment charge | ||||
Period of time new regular retail locations in penetrated markets would need to be opened to be considered for impairment | 1 year | |||
Asset impairment charges | $ 2,018 | $ 802 | $ 6,013 | $ 1,457 |
North America | Retail locations | ||||
Asset impairment charge | ||||
Asset impairment charges | $ 2,018 | $ 802 | $ 6,013 | $ 1,457 |
Derivative Financial Instruments (Details) - USD ($) $ in Thousands |
Oct. 28, 2017 |
Jan. 28, 2017 |
---|---|---|
ASSETS: | ||
Derivatives, assets | $ 2,632 | $ 10,744 |
LIABILITIES: | ||
Derivatives, liabilities | 6,594 | 1,424 |
Derivatives designated as hedging instruments | Cash flow hedges | ||
ASSETS: | ||
Derivatives, assets | 1,854 | 6,948 |
Derivatives designated as hedging instruments | Foreign exchange currency contracts | Other current assets/Other assets | Cash flow hedges | ||
ASSETS: | ||
Derivatives, assets | 1,042 | 6,072 |
Derivatives designated as hedging instruments | Foreign exchange currency contracts | Accrued expenses/Other long-term liabilities | Cash flow hedges | ||
LIABILITIES: | ||
Derivatives, liabilities | 4,744 | 1,250 |
Derivatives designated as hedging instruments | Interest rate swap | Other assets | Cash flow hedges | ||
ASSETS: | ||
Derivatives, assets | 812 | 876 |
Derivatives not designated as hedging instruments | Foreign exchange currency contracts | Other current assets/Other assets | ||
ASSETS: | ||
Derivatives, assets | 778 | 3,796 |
Derivatives not designated as hedging instruments | Foreign exchange currency contracts | Accrued expenses | ||
LIABILITIES: | ||
Derivatives, liabilities | $ 1,850 | $ 174 |
Derivative Financial Instruments (Details 2) - USD ($) |
9 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Oct. 28, 2017 |
Jan. 28, 2017 |
Jul. 29, 2017 |
Oct. 29, 2016 |
Jul. 30, 2016 |
Jan. 30, 2016 |
|
Forward contracts designated as hedging instruments | ||||||
Net unrealized gain (loss) in accumulated other comprehensive income (loss) related to cash flow hedges | $ (5,767,000) | $ 5,400,000 | $ (8,751,000) | $ 2,675,000 | $ (37,000) | $ 7,252,000 |
Foreign exchange currency cash flow hedge unrealized loss to be recognized in cost of product sales or other expense over the following 12 months | (4,700,000) | |||||
Interest rate swap cash flow hedge unrealized gain to be recognized in interest expense after the following 12 months | $ 500,000 | |||||
Cash flow hedges | Europe | Derivatives designated as hedging instruments | ||||||
Forward contracts designated as hedging instruments | ||||||
U.S. dollar forward contracts outstanding, maximum remaining maturity period (in months) | 15 months | |||||
Cash flow hedges | Canada | Derivatives designated as hedging instruments | ||||||
Forward contracts designated as hedging instruments | ||||||
U.S. dollar forward contracts outstanding, maximum remaining maturity period (in months) | 15 months | |||||
Foreign exchange currency contracts | ||||||
Forward contracts designated as hedging instruments | ||||||
Net unrealized gain (loss) in accumulated other comprehensive income (loss) related to cash flow hedges | $ (6,300,000) | |||||
Foreign exchange currency contracts | Cash flow hedges | Europe | Derivatives designated as hedging instruments | ||||||
Forward contracts designated as hedging instruments | ||||||
Total notional amount of derivatives purchased | 108,700,000 | |||||
Notional amount of derivative outstanding | 140,600,000 | 104,200,000 | ||||
Foreign exchange currency contracts | Cash flow hedges | Canada | Derivatives designated as hedging instruments | ||||||
Forward contracts designated as hedging instruments | ||||||
Total notional amount of derivatives purchased | 20,800,000 | |||||
Notional amount of derivative outstanding | 44,400,000 | 66,900,000 | ||||
Interest rate swap | ||||||
Forward contracts designated as hedging instruments | ||||||
Net unrealized gain (loss) in accumulated other comprehensive income (loss) related to cash flow hedges | $ 500,000 | |||||
Interest rate swap | Cash flow hedges | Derivatives designated as hedging instruments | ||||||
Forward contracts designated as hedging instruments | ||||||
Total notional amount of derivatives purchased | 21,500,000 | |||||
Notional amount of derivative outstanding | $ 21,500,000 | |||||
Derivate maturity date | Jan. 31, 2026 | |||||
Fixed rate of interest rate swap designated as a cash flow hedge (as a percent) | 3.06% |
Derivative Financial Instruments (Details 3) - USD ($) |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) | |||||||
Amount of ineffectiveness recognized in net earnings (loss) on interest rate swap | $ 0 | $ 0 | $ 0 | $ 0 | |||
Net after-tax derivative activity recorded in accumulated other comprehensive income (loss) | |||||||
Beginning balance gain (loss) | (8,751,000) | (37,000) | 5,400,000 | 7,252,000 | |||
Net gains (losses) from changes in cash flow hedges | 2,749,000 | 3,305,000 | (10,220,000) | (1,958,000) | |||
Net (gains) losses reclassified to earnings (loss) | 235,000 | (593,000) | (947,000) | (2,619,000) | |||
Ending balance gain (loss) | (5,767,000) | 2,675,000 | (5,767,000) | 2,675,000 | |||
Cost of product sales | |||||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) | |||||||
Gain (loss) recognized in OCI on foreign exchange currency contracts | 3,215,000 | 3,421,000 | (10,601,000) | (2,229,000) | |||
Gain (loss) reclassified from accumulated OCI into earnings (loss) on foreign exchange currency contracts | [1] | 81,000 | 739,000 | 1,360,000 | 3,315,000 | ||
Other income/expense | |||||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) | |||||||
Gain (loss) recognized in OCI on foreign exchange currency contracts | 38,000 | 260,000 | (958,000) | (96,000) | |||
Gain (loss) reclassified from accumulated OCI into earnings (loss) on foreign exchange currency contracts | [1] | (337,000) | 45,000 | (244,000) | 126,000 | ||
Interest expense | |||||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) | |||||||
Gain (loss) recognized in OCI on interest rate swap | 134,000 | 500,000 | (143,000) | (317,000) | |||
Loss reclassified from accumulated OCI into earnings (loss) on interest rate swap | [1] | (57,000) | (57,000) | (119,000) | (167,000) | ||
Interest income | |||||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) | |||||||
Amount of ineffectiveness recognized in net earnings (loss) on foreign exchange currency contracts | $ 500,000 | $ 300,000 | $ 2,000,000 | $ 800,000 | |||
|
Derivative Financial Instruments (Details 4) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
Jan. 28, 2017 |
|
Derivatives not designated as hedging instruments | Euro | |||||
Derivative instruments not designated as hedging instruments | |||||
U.S. dollar forward contracts outstanding, maximum remaining maturity period (in months) | 11 months | ||||
Derivatives not designated as hedging instruments | Canadian dollar | |||||
Derivative instruments not designated as hedging instruments | |||||
U.S. dollar forward contracts outstanding, maximum remaining maturity period (in months) | 11 months | ||||
Foreign exchange currency contracts | Other income/expense | |||||
Derivative instruments not designated as hedging instruments | |||||
Gain (loss) on derivatives not designated as hedging instruments recognized in earnings (loss) before taxes | $ 1,645 | $ 2,440 | $ (5,688) | $ (704) | |
Foreign exchange currency contracts | Derivatives not designated as hedging instruments | Euro | |||||
Derivative instruments not designated as hedging instruments | |||||
Notional amount of derivative outstanding | 70,800 | 70,800 | $ 81,400 | ||
Foreign exchange currency contracts | Derivatives not designated as hedging instruments | Canadian dollar | |||||
Derivative instruments not designated as hedging instruments | |||||
Notional amount of derivative outstanding | 16,600 | 16,600 | $ 13,900 | ||
Interest rate swap | Other income/expense | |||||
Derivative instruments not designated as hedging instruments | |||||
Gain (loss) on derivatives not designated as hedging instruments recognized in earnings (loss) before taxes | $ 0 | $ 0 | $ 0 | $ 38 |
Subsequent Events (Details) - USD ($) |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Nov. 21, 2017 |
Feb. 03, 2018 |
Oct. 28, 2017 |
Apr. 29, 2017 |
Oct. 29, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
Jan. 28, 2017 |
|
Share Repurchases | ||||||||
Shares repurchased, aggregate cost | $ 24,812,000 | $ 3,532,000 | ||||||
Dividends | ||||||||
Cash dividend announced on common stock (in dollars per share) | $ 0.225 | $ 0.225 | $ 0.675 | $ 0.675 | ||||
Subsequent Events | ||||||||
Dividends | ||||||||
Cash dividend announced on common stock (in dollars per share) | $ 0.225 | |||||||
Payment date of cash dividend | Jan. 03, 2018 | |||||||
Record date of cash dividend | Dec. 13, 2017 | |||||||
Share Repurchase Program | ||||||||
Share Repurchases | ||||||||
Number of common stock repurchased (in shares) | 434,772 | 1,485,195 | 0 | 1,919,967 | 0 | |||
Shares repurchased, aggregate cost | $ 7,000,000 | $ 17,800,000 | $ 0 | $ 24,800,000 | $ 0 | |||
Share Repurchase Program | Subsequent Events | ||||||||
Share Repurchases | ||||||||
Number of common stock repurchased (in shares) | 600,000 | |||||||
Shares repurchased, aggregate cost | $ 9,100,000 |
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