LOS ANGELES, Aug. 26, 2015 /PRNewswire/ -- Guess?, Inc.
(NYSE: GES) today reported financial results for its second quarter
ended August 1, 2015.
Second Quarter Fiscal 2016 Highlights
- Americas Retail revenues decreased 5%; retail comp
sales including e-commerce decreased 3% in U.S. dollars and was
flat in constant currency
- Europe revenues
decreased 15% in U.S. dollars and increased 4% in constant
currency
- Asia revenues
decreased 12% in U.S. dollars and 6% in constant
currency
- Americas Wholesale revenues decreased 15% in U.S.
dollars and 9% in constant currency
- Operating earnings decreased 12%
- Earnings per share decreased 19%, including the
negative impact of currency of 38%
Second Quarter Fiscal 2016 Results
For the second quarter of fiscal 2016, the Company recorded net
earnings of $18.3 million, a 16.7%
decrease compared to $22.0 million
for the second quarter of fiscal 2015. Diluted earnings per share
decreased 19.2% to $0.21, compared to
$0.26 for the prior-year quarter. The
negative impact of currency on earnings per share in the second
quarter of fiscal 2016 was approximately 10
cents.
Paul Marciano, Chairman of the
Board and Chief Creative Officer, commented, "I am pleased to
report that second quarter results were better than our
expectations. In our Americas Retail business, comp sales ended
flat for the quarter in constant currency, mainly driven by
continued improvement in the performance of the womens' category.
Our e-commerce business continued to experience solid top-line
growth of 20%. So far in the third quarter, comp sales in the
Americas are roughly flat in constant currency. But I am even more
pleased by the hiring of Victor
Herrero as our new Chief Executive Officer. Victor brings
with him amazing experience and a deep understanding of retail. I
am confident that he has all the required qualities to help write
the next chapter for Guess."
Victor Herrero, Chief Executive
Officer, stated, "I am very honored to be part of the Guess family
and am convinced that the Guess brand has tremendous opportunities.
Already I have identified five initiatives that I'm sure will
create economic value. In the first phase, we will focus on
elevating the quality of our sales organization by leveraging our
field and store structure. We will also unlock the potential of the
Guess Brand in Asia by working to
build a major business in this region. Finally we will create a
culture of purpose and accountability throughout the entire company
by implementing a central organizational structure focused on sales
and profitability. In the second phase, we will revitalize our
wholesale business and improve our overall cost structure. My goal
is to drive long-term value for our shareholders and I am confident
that these initiatives are the right steps towards achieving that
goal."
Total net revenue for the second quarter of fiscal 2016
decreased 10.2% to $546.3 million,
from $608.6 million in the prior-year
quarter. In constant currency, total net revenue decreased 0.6%.
Refer to the accompanying tables for a summary of the impact of
foreign currency exchange rate fluctuations on the Company's net
revenue. Beginning this quarter, the Company has changed the names
of its "North American Retail" and "North American Wholesale"
segments to "Americas Retail" and "Americas Wholesale" to better
reflect that these segments are inclusive of its operations in
North America as well as Central
and South America. There have been
no changes to the underlying reporting in either segment.
- The Company's retail stores and e-commerce sites in the
Americas generated revenue of $232.5
million in the second quarter of fiscal 2016, a 4.7%
decrease from $244.0 million in the
same period a year ago. Comparable store sales including the
results of our e-commerce sites in the U.S. and Canada for the second quarter of fiscal 2016
decreased 2.8% in U.S. dollars and was relatively flat in constant
currency compared to the same period a year ago.
- Net revenue from the Company's Europe segment decreased 15.3% to $199.4 million in the second quarter of fiscal
2016, from $235.3 million in the
prior-year period. In constant currency, net revenue increased
3.7%.
- Net revenue from the Company's Asia segment decreased 11.7% to $56.7 million in the second quarter of fiscal
2016, from $64.3 million in the
prior-year period. In constant currency, net revenue decreased
6.0%.
- Net revenue from the Company's Americas Wholesale segment
decreased 15.4% to $32.4 million in
the second quarter of fiscal 2016, from $38.3 million in the prior-year period. In
constant currency, net revenue decreased 9.0%.
- Licensing segment net revenue decreased 5.5% to
$25.3 million in the second quarter
of fiscal 2016, from $26.8 million in
the prior-year period.
Operating earnings for the second quarter of fiscal 2016
decreased 12.2% to $26.2 million
(including a $4.4 million unfavorable
currency translation impact), from $29.9
million in the prior-year period. Operating margin in the
second quarter was down 10 basis points at 4.8%, compared to 4.9%
in the prior-year quarter. Operating margin was negatively impacted
by currency exchange rate fluctuations and charges related to legal
matters. These decreases were mostly offset by overall product
margin improvements relating to higher initial mark-ups in
Europe and Americas Retail and
less markdowns in Americas Retail.
- Operating margin for the Company's Americas Retail
segment increased 420 basis points to 2.3% in the second quarter of
fiscal 2016, compared to negative 1.9% in the prior-year period.
The increase in operating margin was driven by higher gross margins
due primarily to less markdowns and higher initial mark-ups,
partially offset by the unfavorable impact from currency exchange
rate fluctuations on product costs, and a lower SG&A rate
driven by lower store impairment charges.
- Operating margin for the Company's Europe segment decreased 130 basis points to
9.1% in the second quarter of fiscal 2016, compared to 10.4% in the
prior-year period. The decrease in operating margin was driven
primarily by lower gross margins due to the unfavorable impact from
currency exchange rate fluctuations on product costs, partially
offset by higher initial mark-ups.
- Operating margin for the Company's Asia segment decreased 190 basis points to
1.6% in the second quarter of fiscal 2016, compared to 3.5% in the
prior-year period. The decrease in operating margin was driven by
lower gross margins in South Korea
and a higher SG&A rate due primarily to overall
deleveraging.
- Operating margin for the Company's Americas Wholesale
segment increased 160 basis points to 15.1% in the second quarter
of fiscal 2016, compared to 13.5% in the prior-year period. The
increase in operating margin was due to higher product margins,
partially offset by an overall deleveraging of SG&A
expenses.
- Operating margin for the Company's Licensing segment
decreased 450 basis points to 88.5% in the second quarter of fiscal
2016, compared to 93.0% in the prior-year period.
Other net income, which primarily includes net unrealized and
realized mark-to-market gains on foreign currency contracts, was
$3.7 million for the second quarter
of fiscal 2016, compared to $4.8
million in the prior-year quarter.
The Company's effective tax rate increased to 37.2% for the
second quarter of fiscal 2016, compared to 34.8% in the prior-year
quarter.
Six-Month Period Results
Net earnings for the six months ended August 1, 2015 were $21.6
million, an increase of 9.0% compared to $19.9 million for the six months ended
August 2, 2014. Diluted earnings per
share increased 8.7% to $0.25,
compared to $0.23 for the prior-year
period. The negative impact of currency on earnings per share for
the six months ended August 1, 2015
was approximately 11 cents.
Total net revenue for the first six months of fiscal 2016
decreased 9.4% to $1.03 billion, from
$1.13 billion in the prior-year
period. In constant currency, total net revenue decreased 0.3%.
Refer to the accompanying tables for a summary of the impact of
foreign currency exchange rate fluctuations on the Company's net
revenue.
- The Company's retail stores and e-commerce sites in the
Americas generated revenue of $446.7
million in the first six months of fiscal 2016, a 5.4%
decrease from $472.3 million in the
same period a year ago. Comparable store sales including the
results of our e-commerce sites in the U.S. and Canada for the six months ended August 1, 2015 decreased 4.3% in U.S. dollars and
1.8% in constant currency compared to the same period a year
ago.
- Net revenue from the Company's Europe segment decreased 14.6% to $336.8 million in the first six months of fiscal
2016, from $394.4 million in the
prior-year period. In constant currency, net revenue increased
5.3%.
- Net revenue from the Company's Asia segment decreased 10.1% to $120.8 million in the first six months of fiscal
2016, from $134.4 million in the
prior-year period. In constant currency, net revenue decreased
6.0%.
- Net revenue from the Company's Americas Wholesale segment
decreased 10.2% to $69.6 million in
the first six months of fiscal 2016, from $77.6 million in the prior-year period. In
constant currency, net revenue decreased 3.8%.
- Licensing segment net revenue decreased 2.3% to
$51.2 million in the first six months
of fiscal 2016, from $52.4 million in
the prior-year period.
Operating earnings for the first six months of fiscal 2016
increased 9.6% to $30.6 million
(including a $3.2 million unfavorable
currency translation impact), from $27.9
million in the prior-year period. Operating margin in the
first six months of fiscal 2016 increased 50 basis points to 3.0%,
compared to 2.5% in the prior-year period. The increase in
operating margin was driven by overall product margin improvements
relating to higher initial mark-ups in Europe and Americas Retail and less markdowns
in Americas Retail. These increases were partially offset by the
unfavorable impact from currency exchange rate fluctuations, the
negative impact on the Company's fixed cost structure from negative
same store sales in Americas Retail and charges related to
legal matters.
- Operating margin for the Company's Americas Retail
segment increased 240 basis points to negative 0.4% in the first
six months of fiscal 2016, compared to negative 2.8% in the
prior-year period. The increase in operating margin was driven
primarily by higher gross margins due primarily to less markdowns
and higher initial mark-ups, partially offset by the negative
impact on the fixed cost structure resulting from negative
comparable store sales and the unfavorable impact from currency
exchange rate fluctuations on product costs.
- Operating margin for the Company's Europe segment decreased 20 basis points to
4.3% in the first six months of fiscal 2016, compared to 4.5% in
the prior-year period. The decrease in operating margin was driven
by lower gross margins due to the unfavorable impact from currency
exchange rate fluctuations on product costs, partially offset by
higher initial mark-ups.
- Operating margin for the Company's Asia segment increased 40 basis points to 4.6%
in the first six months of fiscal 2016, compared to 4.2% in the
prior-year period. The increase in operating margin was driven by a
lower SG&A rate due primarily to an overall leveraging of
expenses as we phase out of our G by GUESS concept in South Korea, partially offset by lower gross
margins in South
Korea.
- Operating margin for the Company's Americas Wholesale
segment was flat at 16.7% in the first six months of fiscal 2016
compared to the prior-year period.
- Operating margin for the Company's Licensing segment
decreased 210 basis points to 88.8% in the first six months of
fiscal 2016, compared to 90.9% in the prior-year
period.
Other net income, which primarily includes net unrealized and
realized mark-to-market gains on foreign currency contracts and net
unrealized and realized gains on non-operating assets, was
$6.3 million for the first six months
of fiscal 2016, compared to $3.6
million in the prior-year period.
The Company's effective tax rate increased to 38.0% for the
first six months of fiscal 2016, compared to 35.1% in the
prior-year period.
Outlook
The following guidance assumes that foreign currency exchange
rates remain at prevailing rates:
The Company's expectations for the third quarter of fiscal 2016
ending October 31, 2015, are as follows:
- Consolidated net revenues are expected to decline between
4.5% and 3.0% in constant currency. Currency headwinds are expected
to negatively impact consolidated revenue growth by approximately
8.0%, for a net decline between 12.5% and 11.0%.
- Operating margin is expected to be between 2.0% and 3.0%
and includes 150 basis points of currency headwind.
- Diluted earnings per share are expected to be in the
range of $0.08 to $0.12. The
estimated impact on earnings per share of the currency headwinds is
approximately $0.12.
The Company updated its outlook for the fiscal year ending
January 30, 2016, which is now as follows:
- Consolidated net revenues are expected to decline between
1.5% and 0.5% in constant currency. Currency headwinds are expected
to negatively impact consolidated revenue growth by approximately
7.5%, for a net decline between 9.0% and 8.0%.
- Operating margin is expected to be between 5.0% and 6.0%
and includes 130 basis points of currency headwind.
- Diluted earnings per share are expected to be in the
range of $0.89 to $1.02. The
estimated impact on earnings per share of the currency headwinds is
approximately $0.40.
On a segment basis, the Company expects the following ranges for
percentage changes for comparable store sales ("comps") and net
revenue in constant currency and U.S. dollars compared to the same
prior-year period:
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Outlook by
Segment1
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Third Quarter of
Fiscal 2016
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Fiscal Year
2016
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Constant
Currency2
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U.S.
Dollars
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Constant
Currency2
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U.S.
Dollars
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Americas
Retail3:
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Comps
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flat to up
LSD
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down LSD
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flat to up
LSD
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down LSD
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Net
Revenue
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down LSD to up
LSD
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down LSD
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down LSD to
flat
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down LSD
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Europe:
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Comps
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up MSD
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__
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up LSD
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__
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Net
Revenue
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down MSD
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down
low-twenties
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up LSD
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down
low-teens
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Asia:
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Net
Revenue
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down MSD to
LSD
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down low-teens to
LDD
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down HSD
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down
low-teens
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Americas
Wholesale3:
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Net
Revenue
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down HSD
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down
high-teens
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down MSD
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down
low-teens
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Licensing:
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Net
Revenue
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__
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down MSD
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__
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down LSD
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Notes
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1
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As used in the table
above, "LSD" is used to refer to the range of Low-Single-Digits,
"MSD" is used to refer to the range of Mid-Single-Digits, "HSD" is
used to refer to the range of High-Single-Digits, and "LDD" is used
to refer to the range of Low-Double-Digits.
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2
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Eliminates the impact
of expected foreign currency translation to give investors a better
understanding of the underlying trends within the
business.
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3
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Beginning this
quarter, the Company has changed the names of its "North American
Retail" and "North American Wholesale" segments to "Americas
Retail" and "Americas Wholesale" to better reflect that these
segments are inclusive of its operations in North America as well
as Central and South America. There have been no changes to the
underlying reporting in either segment.
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Dividends
The Company also announced today that its Board of Directors has
approved a quarterly cash dividend of $0.225 per share on the Company's common stock.
The dividend will be payable on September 25, 2015 to
shareholders of record at the close of business on
September 9, 2015.
Presentation of Non-GAAP Information
The financial information presented in this release includes
non-GAAP financial measures such as constant currency financial
information and free cash flow measures. The non-GAAP measures are
provided in addition to, and not as alternatives for, the Company's
reported GAAP results.
This release includes certain constant currency financial
information. Foreign currency exchange rate fluctuations affect the
amount reported from translating the Company's foreign revenue,
expenses and balance sheet amounts into U.S. dollars. These rate
fluctuations can have a significant effect on reported operating
results under GAAP. The Company provides constant currency
information to enhance the visibility of underlying business
trends, excluding the effects of changes in foreign currency
translation rates. To calculate net revenue, comparable store sales
and earnings (loss) from operations on a constant currency basis,
operating or forecasted results for the current-year period are
translated into U.S. dollars at the average exchange rates in
effect during the comparable period of the prior year. The constant
currency calculations do not adjust for the impact of revaluing
specific transactions denominated in a currency that is different
to the functional currency of that entity when exchange rates
fluctuate. However, in calculating the estimated impact of currency
on our earnings per share guidance for the third quarter and full
year of fiscal 2016, the Company estimates gross margin (including
the impact of merchandise-related hedges) and expenses using the
appropriate prior-year rates, translates the estimated foreign
earnings at the comparable prior-year rates, and excludes the
year-over-year earnings impact of gains or losses arising from
balance sheet remeasurement and foreign currency contracts not
designated as merchandise hedges. The constant currency information
presented may not be comparable to similarly titled measures
reported by other companies.
The Company also includes information regarding its free cash
flows in this release. The Company calculates free cash flows as
cash flows from operating activities less purchases of property and
equipment. Free cash flows is not intended to be an alternative to
cash flows from operating activities as a measure of liquidity, but
rather provides additional visibility to investors regarding how
much cash is generated for discretionary and non-discretionary
items after deducting purchases of property and equipment. Free
cash flow information presented may not be comparable to similarly
titled measures reported by other companies. A reconciliation of
reported GAAP cash flows from operating activities to the
comparable non-GAAP free cash flow measure is provided in the
accompanying tables.
Investor Conference Call
The Company will hold a conference call at 4:30 pm (ET) on August 26, 2015 to discuss
the news announced in this press release. A live webcast of the
conference call will be accessible at www.guess.com via the
"Investor Relations" link. The webcast will be archived on the
website for 30 days.
About Guess?
Guess?, Inc. designs, markets, distributes and licenses a
lifestyle collection of contemporary apparel, denim, handbags,
watches, footwear and other related consumer products. Guess?
products are distributed through branded Guess? stores as well as
better department and specialty stores around the world. As of
August 1, 2015, the Company directly operated 815 retail
stores in the Americas, Europe and
Asia. The Company's licensees and
distributors operated 808 additional retail stores outside of
the United States and Canada. As of August 1, 2015, the Company
and its licensees and distributors operated in more than 90
countries worldwide. For more information about the Company, please
visit www.guess.com.
Forward-Looking Statements
Except for historical information contained herein, certain
matters discussed in this press release or the related conference
call and webcast, including statements concerning the Company's
expectations, future prospects and strategic initiatives (including
those identified by the Company's new Chief Executive Officer,
Victor Herrero), as well as guidance
for the third quarter and full year of fiscal 2016, are
forward-looking statements that are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements, which are frequently indicated
by terms such as "expect," "will," "goal," "strategy," "believe,"
"continue," "outlook," "plan" and similar terms, are only
expectations, and involve known and unknown risks and
uncertainties, which may cause actual results in future periods to
differ materially from what is currently anticipated. Factors which
may cause actual results in future periods to differ materially
from current expectations include, among others: our ability to
maintain our brand image and reputation; domestic and international
economic conditions, including economic and other events that could
negatively impact consumer confidence and discretionary consumer
spending; changes in the competitive marketplace and in our
commercial relationships; our ability to anticipate and respond to
consumer preferences and trends; our ability to manage our
inventory commensurate with customer demand; risks related to the
timing and costs of delivering merchandise to our stores and our
wholesale customers; our ability to effectively operate our various
retail concepts, including securing, renewing, modifying or
terminating leases for store locations; our ability to successfully
implement our growth strategies and other strategic initiatives;
our ability to successfully implement plans for cost savings;
unexpected obligations arising from new or existing litigation, tax
and other regulatory proceedings; accounting adjustments identified
from subsequent events arising after issuance of this release;
risks associated with our foreign operations, such as violations of
laws prohibiting improper payments and the burdens of complying
with a variety of foreign laws and regulations; risks associated
with the acts or omissions of our third party vendors, including a
failure to comply with our vendor code of conduct or other
policies; risks associated with cyber attacks and other cyber
security risks; and changes in economic, political, social and
other conditions affecting our foreign operations and sourcing,
including the impact of currency fluctuations, global tax rates and
economic and market conditions in Eastern
Europe, Southern Europe and
Asia (particularly China and Korea). In addition to these
factors, the economic, technological, managerial, and other risks
identified in the Company's most recent annual report on Form 10-K
and other filings with the Securities and Exchange Commission,
including but not limited to the risk factors discussed therein,
could cause actual results to differ materially from current
expectations. The Company undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
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Guess?, Inc. and
Subsidiaries
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Condensed
Consolidated Statements of Income
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(amounts in
thousands, except per share data)
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Three Months
Ended
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Six Months
Ended
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August 1,
2015
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August 2,
2014
|
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August 1,
2015
|
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August 2,
2014
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$
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%
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|
$
|
%
|
|
$
|
%
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|
$
|
%
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Product
sales
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$
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520,937
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|
95.4%
|
|
$
|
581,779
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|
95.6%
|
|
$
|
973,896
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|
95.0%
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$
|
1,078,707
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|
95.4%
|
Net
royalties
|
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25,327
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4.6%
|
|
26,792
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4.4%
|
|
51,192
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5.0%
|
|
52,405
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|
4.6%
|
Net
revenue
|
|
546,264
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|
100.0%
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|
608,571
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|
100.0%
|
|
1,025,088
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|
100.0%
|
|
1,131,112
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|
100.0%
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Cost of product
sales
|
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348,147
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63.7%
|
|
391,794
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|
64.4%
|
|
661,486
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64.5%
|
|
738,104
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|
65.3%
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Gross
profit
|
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198,117
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|
36.3%
|
|
216,777
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35.6%
|
|
363,602
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35.5%
|
|
393,008
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|
34.7%
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Selling, general and
administrative expenses
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171,916
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31.5%
|
|
186,919
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30.7%
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|
333,048
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|
32.5%
|
|
365,127
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|
32.2%
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Earnings from
operations
|
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26,201
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|
4.8%
|
|
29,858
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4.9%
|
|
30,554
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|
3.0%
|
|
27,881
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|
2.5%
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Other income
(expense):
|
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|
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|
Interest
expense
|
|
(729)
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|
(0.1%)
|
|
(772)
|
|
(0.1%)
|
|
(1,164)
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|
(0.1%)
|
|
(1,297)
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|
(0.1%)
|
|
|
Interest
income
|
|
239
|
|
0.1%
|
|
320
|
|
0.1%
|
|
511
|
|
0.0%
|
|
725
|
|
0.1%
|
|
|
Other, net
|
|
3,708
|
|
0.6%
|
|
4,766
|
|
0.7%
|
|
6,334
|
|
0.6%
|
|
3,647
|
|
0.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before
income tax expense
|
|
29,419
|
|
5.4%
|
|
34,172
|
|
5.6%
|
|
36,235
|
|
3.5%
|
|
30,956
|
|
2.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
10,940
|
|
2.0%
|
|
11,900
|
|
1.9%
|
|
13,769
|
|
1.3%
|
|
10,871
|
|
0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
18,479
|
|
3.4%
|
|
22,272
|
|
3.7%
|
|
22,466
|
|
2.2%
|
|
20,085
|
|
1.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to noncontrolling interests
|
|
190
|
|
0.1%
|
|
318
|
|
0.1%
|
|
836
|
|
0.1%
|
|
232
|
|
0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to Guess?, Inc.
|
|
$
|
18,289
|
|
3.3%
|
|
$
|
21,954
|
|
3.6%
|
|
$
|
21,630
|
|
2.1%
|
|
$
|
19,853
|
|
1.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
common share attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.21
|
|
|
|
$
|
0.26
|
|
|
|
$
|
0.25
|
|
|
|
$
|
0.23
|
|
|
|
|
Diluted
|
|
$
|
0.21
|
|
|
|
$
|
0.26
|
|
|
|
$
|
0.25
|
|
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding attributable to common
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
85,004
|
|
|
|
84,573
|
|
|
|
84,985
|
|
|
|
84,536
|
|
|
|
|
Diluted
|
|
85,290
|
|
|
|
84,799
|
|
|
|
85,132
|
|
|
|
84,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guess?, Inc. and
Subsidiaries
|
Consolidated
Segment Data
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
|
August
1,
|
|
August
2,
|
|
%
|
|
August
1,
|
|
August
2,
|
|
%
|
|
|
|
|
|
|
2015
|
|
2014
|
|
change
|
|
2015
|
|
2014
|
|
change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Retail1
|
$
|
232,456
|
|
|
$
|
244,000
|
|
|
(5%)
|
|
$
|
446,705
|
|
|
$
|
472,344
|
|
|
(5%)
|
|
Europe
|
199,375
|
|
|
235,260
|
|
|
(15%)
|
|
336,772
|
|
|
394,418
|
|
|
(15%)
|
|
Asia
|
56,745
|
|
|
64,267
|
|
|
(12%)
|
|
120,780
|
|
|
134,385
|
|
|
(10%)
|
|
Americas
Wholesale1
|
32,361
|
|
|
38,252
|
|
|
(15%)
|
|
69,639
|
|
|
77,560
|
|
|
(10%)
|
|
Licensing
|
25,327
|
|
|
26,792
|
|
|
(5%)
|
|
51,192
|
|
|
52,405
|
|
|
(2%)
|
|
|
|
|
|
|
$
|
546,264
|
|
|
$
|
608,571
|
|
|
(10%)
|
|
$
|
1,025,088
|
|
|
$
|
1,131,112
|
|
|
(9%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Retail1
|
$
|
5,244
|
|
|
$
|
(4,662)
|
|
|
212%
|
|
$
|
(1,965)
|
|
|
$
|
(13,061)
|
|
|
85%
|
|
Europe
|
18,186
|
|
|
24,513
|
|
|
(26%)
|
|
14,518
|
|
|
17,881
|
|
|
(19%)
|
|
Asia
|
887
|
|
|
2,264
|
|
|
(61%)
|
|
5,500
|
|
|
5,617
|
|
|
(2%)
|
|
Americas
Wholesale1
|
4,872
|
|
|
5,167
|
|
|
(6%)
|
|
11,619
|
|
|
12,920
|
|
|
(10%)
|
|
Licensing
|
22,415
|
|
|
24,909
|
|
|
(10%)
|
|
45,440
|
|
|
47,630
|
|
|
(5%)
|
|
Corporate
Overhead
|
(25,403)
|
|
|
(22,333)
|
|
|
14%
|
|
(44,558)
|
|
|
(43,106)
|
|
|
3%
|
|
|
|
|
|
|
$
|
26,201
|
|
|
$
|
29,858
|
|
|
(12%)
|
|
$
|
30,554
|
|
|
$
|
27,881
|
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margins:
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Retail1
|
2.3%
|
|
|
(1.9%)
|
|
|
|
|
(0.4%)
|
|
|
(2.8%)
|
|
|
|
|
Europe
|
9.1%
|
|
|
10.4%
|
|
|
|
|
4.3%
|
|
|
4.5%
|
|
|
|
|
Asia
|
1.6%
|
|
|
3.5%
|
|
|
|
|
4.6%
|
|
|
4.2%
|
|
|
|
|
Americas
Wholesale1
|
15.1%
|
|
|
13.5%
|
|
|
|
|
16.7%
|
|
|
16.7%
|
|
|
|
|
Licensing
|
88.5%
|
|
|
93.0%
|
|
|
|
|
88.8%
|
|
|
90.9%
|
|
|
|
|
Total
Company
|
4.8%
|
|
|
4.9%
|
|
|
|
|
3.0%
|
|
|
2.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Beginning this
quarter, the Company has changed the names of its "North American
Retail" and "North American Wholesale" segments to "Americas
Retail" and "Americas Wholesale" to better reflect that these
segments are inclusive of its operations in North America as well
as Central and South America. There have been no changes to the
underlying reporting in either segment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guess?, Inc. and
Subsidiaries
|
Constant Currency
Financial Measures
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
August 1,
2015
|
|
August 2,
2014
|
|
%
change
|
|
As
Reported
|
|
Foreign
Currency
Impact
|
|
Constant
Currency
|
|
As
Reported
|
|
As
Reported
|
|
Constant
Currency
|
Net
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Retail1
|
$
|
232,456
|
|
|
$
|
7,808
|
|
|
$
|
240,264
|
|
|
$
|
244,000
|
|
|
(5%)
|
|
(2%)
|
|
Europe
|
199,375
|
|
|
44,643
|
|
|
244,018
|
|
|
235,260
|
|
|
(15%)
|
|
4%
|
|
Asia
|
56,745
|
|
|
3,677
|
|
|
60,422
|
|
|
64,267
|
|
|
(12%)
|
|
(6%)
|
|
Americas
Wholesale1
|
32,361
|
|
|
2,439
|
|
|
34,800
|
|
|
38,252
|
|
|
(15%)
|
|
(9%)
|
|
Licensing
|
25,327
|
|
|
—
|
|
|
25,327
|
|
|
26,792
|
|
|
(5%)
|
|
(5%)
|
|
|
|
|
|
|
$
|
546,264
|
|
|
$
|
58,567
|
|
|
$
|
604,831
|
|
|
$
|
608,571
|
|
|
(10%)
|
|
(1%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
August 1,
2015
|
|
August 2,
2014
|
|
%
change
|
|
As
Reported
|
|
Foreign
Currency
Impact
|
|
Constant
Currency
|
|
As
Reported
|
|
As
Reported
|
|
Constant
Currency
|
Net
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Retail1
|
$
|
446,705
|
|
|
$
|
13,169
|
|
|
$
|
459,874
|
|
|
$
|
472,344
|
|
|
(5%)
|
|
(3%)
|
|
Europe
|
336,772
|
|
|
78,392
|
|
|
415,164
|
|
|
394,418
|
|
|
(15%)
|
|
5%
|
|
Asia
|
120,780
|
|
|
5,562
|
|
|
126,342
|
|
|
134,385
|
|
|
(10%)
|
|
(6%)
|
|
Americas
Wholesale1
|
69,639
|
|
|
5,012
|
|
|
74,651
|
|
|
77,560
|
|
|
(10%)
|
|
(4%)
|
|
Licensing
|
51,192
|
|
|
—
|
|
|
51,192
|
|
|
52,405
|
|
|
(2%)
|
|
(2%)
|
|
|
|
|
|
|
$
|
1,025,088
|
|
|
$
|
102,135
|
|
|
$
|
1,127,223
|
|
|
$
|
1,131,112
|
|
|
(9%)
|
|
(0%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Beginning this
quarter, the Company has changed the names of its "North American
Retail" and "North American Wholesale" segments to "Americas
Retail" and "Americas Wholesale" to better reflect that these
segments are inclusive of its operations in North America as well
as Central and South America. There have been no changes to the
underlying reporting in either segment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guess?, Inc. and
Subsidiaries
|
Selected Condensed
Consolidated Balance Sheet Data
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August
1,
|
|
January 31,
|
|
August
2,
|
|
|
|
|
|
|
|
|
2015
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
470,946
|
|
|
$
|
483,483
|
|
|
$
|
461,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
investments
|
—
|
|
|
—
|
|
|
5,019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables,
net
|
198,735
|
|
|
216,205
|
|
|
233,906
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
335,460
|
|
|
319,078
|
|
|
392,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other current
assets
|
85,013
|
|
|
92,593
|
|
|
109,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
241,579
|
|
|
259,524
|
|
|
309,155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
assets
|
231,879
|
|
|
230,522
|
|
|
228,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
$
|
1,563,612
|
|
|
$
|
1,601,405
|
|
|
$
|
1,740,419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of
capital lease obligations and borrowings
|
$
|
4,840
|
|
|
$
|
1,548
|
|
|
$
|
1,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other current
liabilities
|
314,376
|
|
|
300,418
|
|
|
358,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt and
capital lease obligations
|
2,057
|
|
|
6,165
|
|
|
6,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other long-term
liabilities
|
178,541
|
|
|
199,391
|
|
|
204,739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable and
nonredeemable noncontrolling interests
|
17,345
|
|
|
20,027
|
|
|
21,289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guess?, Inc.
stockholders' equity
|
1,046,453
|
|
|
1,073,856
|
|
|
1,147,490
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholders' Equity
|
$
|
1,563,612
|
|
|
$
|
1,601,405
|
|
|
$
|
1,740,419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guess?, Inc. and
Subsidiaries
|
Condensed
Consolidated Cash Flow Data
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
August
1,
|
|
August
2,
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
|
$
|
56,736
|
|
|
$
|
30,363
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
|
(17,227)
|
|
|
(32,550)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
financing activities
|
|
|
(44,443)
|
|
|
(40,622)
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rates on cash and cash equivalents
|
|
|
(7,603)
|
|
|
1,383
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
|
|
(12,537)
|
|
|
(41,426)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the beginning of the year
|
|
|
483,483
|
|
|
502,945
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the end of the period
|
|
|
$
|
470,946
|
|
|
$
|
461,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
$
|
36,443
|
|
|
$
|
42,654
|
|
|
|
|
|
|
|
|
|
|
|
|
Rent
|
|
|
$
|
129,611
|
|
|
$
|
142,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guess?, Inc. and
Subsidiaries
|
Reconciliation of
Net Cash Provided by Operating Activities to Free Cash
Flow
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
August
1,
|
|
August
2,
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
|
$
|
56,736
|
|
|
$
|
30,363
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Purchases of
property and equipment
|
|
|
(24,963)
|
|
|
(32,316)
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash
flow
|
|
|
$
|
31,773
|
|
|
$
|
(1,953)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guess?, Inc. and
Subsidiaries
|
Retail Store
Data
|
International
Store Count
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
August 1, 2015
|
|
As of
August 2, 2014
|
|
|
|
|
Total
|
|
Directly
Operated
|
|
Total
|
|
Directly
Operated
|
Region
|
|
|
|
Stores
|
|
Stores
|
|
Stores
|
|
Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
United States and
Canada
|
456
|
|
456
|
|
488
|
|
488
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe and the Middle
East
|
594
|
|
266
|
|
615
|
|
264
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia
|
478
|
|
50
|
|
495
|
|
46
|
|
|
|
|
|
|
|
|
|
|
|
|
Central and South
America
|
95
|
|
43
|
|
87
|
|
39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,623
|
|
815
|
|
1,685
|
|
837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guess?, Inc. and
Subsidiaries
|
Retail Store
Data
|
U.S. and
Canada
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
August
1,
|
|
August
2,
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Number of stores at
the beginning of the year
|
|
|
481
|
|
494
|
|
|
|
|
|
|
|
|
|
|
|
|
Store
openings
|
|
|
4
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
Store
closures
|
|
|
(29)
|
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
Number of stores at
the end of the period
|
|
|
456
|
|
488
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total store square
footage at the end of the period
|
|
|
2,194,000
|
|
2,316,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guess?, Inc. and
Subsidiaries
|
Americas Retail
Net Revenue
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
August
1,
|
|
August
2,
|
|
%
|
|
August
1,
|
|
August
2,
|
|
%
|
|
2015
|
|
2014
|
|
change
|
|
2015
|
|
2014
|
|
change
|
Net
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
stores
|
$
|
214,224
|
|
|
$
|
228,825
|
|
|
(6.4%)
|
|
$
|
410,261
|
|
|
$
|
441,172
|
|
|
(7.0%)
|
|
|
|
|
|
|
|
|
|
|
|
|
E-commerce
sites
|
18,232
|
|
|
15,175
|
|
|
20.1%
|
|
36,444
|
|
|
31,172
|
|
|
16.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
232,456
|
|
|
$
|
244,000
|
|
|
(4.7%)
|
|
$
|
446,705
|
|
|
$
|
472,344
|
|
|
(5.4%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guess?, Inc. and
Subsidiaries
|
Retail Store
Change in Comparable Store Sales
|
U.S. and
Canada
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
August 1,
2015
|
|
August 1,
2015
|
|
U.S.
Dollars
|
|
Constant
Currency
|
|
U.S.
Dollars
|
|
Constant
Currency
|
|
|
|
|
|
|
|
|
Excluding e-commerce
sales
|
(4.6%)
|
|
(1.7%)
|
|
(6.2%)
|
|
(3.7%)
|
|
|
|
|
|
|
|
|
Impact of e-commerce
sales
|
1.8%
|
|
1.9%
|
|
1.9%
|
|
1.9%
|
|
|
|
|
|
|
|
|
Including e-commerce
sales
|
(2.8%)
|
|
0.2%
|
|
(4.3%)
|
|
(1.8%)
|
|
|
|
|
Contact:
|
Guess?,
Inc.
|
|
|
Fabrice
Benarouche
|
|
|
VP, Finance and
Investor Relations
|
|
|
(213)
765-5578
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/guess-inc-reports-second-quarter-results-300133700.html
SOURCE Guess?, Inc.