Reaffirms Plan to Deliver 10% Operating Margin by Fiscal 2025
Q4 Fiscal 2021 Revenues Decreased 23% to
Q4 Fiscal 2021 GAAP Earnings Per Share (“EPS”) of
Fiscal Year 2021 Revenues Decreased 30% to
Fiscal Year 2021 GAAP Loss Per Share of
Adjusted Amounts
This press release contains certain non-GAAP, or adjusted, financial measures. References to “adjusted” results exclude the impact of (i) asset impairment charges, (ii) net gains on lease modifications, (iii) certain professional service, legal fees and related net credits, (iv) certain separation charges, (v) non-cash debt discount amortization on our convertible senior notes, (vi) the related tax effects of the foregoing items as well as the impact from changes in the tax law on deferred taxes in certain tax jurisdictions, net tax settlements and adjustments to specific uncertain income tax positions and (vii) certain discrete income tax adjustments, in each case where applicable. A reconciliation of reported GAAP results to comparable non-GAAP results is provided in the accompanying tables and discussed under the heading “Presentation of Non-GAAP Information” below.
COVID-19 Fourth Quarter Business Update
The coronavirus (or “COVID-19”) pandemic has had and is continuing to have a material impact on the Company’s financial performance. During the fourth quarter of fiscal 2021, the Company continued to experience lower net revenue compared to the same prior-year period as it remained challenged by lower demand, temporary store closures and capacity restrictions. The Company partially offset these revenue declines by reducing its SG&A expenses for the quarter through expense savings. Toward the end of the third quarter of fiscal 2021, the Company started to incur a new round of government-mandated temporary store closures, mostly in
Fourth Quarter Fiscal 2021 Results
For the fourth quarter of fiscal 2021, the Company recorded GAAP net earnings of
For the fourth quarter of fiscal 2021, the Company’s adjusted net earnings were
Net Revenue. Total net revenue for the fourth quarter of fiscal 2021 decreased 23.0% to
-
Americas Retail revenues decreased 24.2% in
U.S. dollars and 24.0% in constant currency. Retail comp sales including e-commerce decreased 15% inU.S. dollars and constant currency. -
Americas Wholesale revenues decreased 15.3% in
U.S. dollars and 14.1% in constant currency. -
Europe revenues decreased 26.8% inU.S. dollars and 31.8% in constant currency. Retail comp sales including e-commerce increased 2% inU.S. dollars and decreased 5% in constant currency. -
Asia revenues decreased 16.2% inU.S. dollars and 20.7% in constant currency. Retail comp sales including e-commerce decreased 18% inU.S. dollars and 22% in constant currency. -
Licensing revenues increased 12.2% in
U.S. dollars.
Earnings from Operations. GAAP earnings from operations for the fourth quarter of fiscal 2021 decreased 25.5% to
For the fourth quarter of fiscal 2021, adjusted earnings from operations decreased 27.0% to
- Operating margin for the Company’s Americas Retail segment increased 640 basis points to 12.8% in the fourth quarter of fiscal 2021, compared to 6.4% in the same prior-year quarter, driven primarily by lower store occupancy costs and store selling expenses and, to a lesser extent, lower markdowns, partially offset by the deleveraging impact of negative comp sales resulting from lower traffic as a result of the COVID-19 pandemic.
- Operating margin for the Company’s Americas Wholesale segment increased 390 basis points to 23.5% in the fourth quarter of fiscal 2021, compared to 19.6% in the same prior-year quarter, due mainly to higher selling prices and reduced sales discounts and allowances.
-
Operating margin for the Company’s
Europe segment decreased 620 basis points to 12.7% in the fourth quarter of fiscal 2021, from 18.9% in the same prior-year quarter, driven primarily by overall deleveraging of expenses due to lower revenue as a result of the COVID-19 pandemic as well as the timing shift of wholesale shipments into the first quarter of fiscal 2022, partially offset by the favorable impact of higher initial markups, government subsidies and rent concessions. -
Operating margin for the Company’s
Asia segment increased 340 basis points to 5.0% in the fourth quarter of fiscal 2021, compared to 1.6% in the same prior-year quarter, due mainly to lower expenses, partially offset by the unfavorable impact of deleverage. - Operating margin for the Company’s Licensing segment increased 820 basis points to 95.3% in the fourth quarter of fiscal 2021, compared to 87.1% in the same prior-year quarter, due to lower expenses.
Other income, net, was
Full Fiscal Year Results
For the fiscal year ended
For the fiscal year ended
Net Revenue. Total net revenue for fiscal 2021 decreased 29.9% to
-
Americas Retail revenues decreased 37.1% in
U.S. dollars and 36.7% in constant currency. -
Americas Wholesale revenues decreased 36.9% in
U.S. dollars and 34.8% in constant currency. -
Europe revenues decreased 24.6% inU.S. dollars and 27.2% in constant currency. -
Asia revenues decreased 32.8% inU.S. dollars and 33.8% in constant currency. -
Licensing revenues decreased 13.8% in
U.S. dollars.
Earnings (Loss) from Operations. GAAP loss from operations for fiscal 2021 was
For the fiscal year ended
- Operating margin for the Company’s Americas Retail segment decreased 580 basis points to negative 3.1% in fiscal 2021, from 2.7% in the prior year, driven primarily by the deleveraging impact of temporary store closures and lower traffic as a result of the COVID-19 pandemic, partially offset by lower store selling expenses and lower occupancy costs.
- Operating margin for the Company’s Americas Wholesale segment decreased 220 basis points to 16.9% in fiscal 2021, from 19.1% in the prior year, due mainly to the negative impact from the COVID-19 pandemic on our revenues which resulted in overall deleveraging of expenses.
-
Operating margin for the Company’s
Europe segment decreased 360 basis points to 7.1% in fiscal 2021, from 10.7% in the prior year, driven primarily by overall deleveraging of expenses due to lower revenue as a result of the COVID-19 pandemic, partially offset by the favorable impact of higher initial markups, rent concessions and government subsidies. -
Operating margin for the Company’s
Asia segment decreased 6.3% to negative 8.9% in fiscal 2021, from negative 2.6% in the prior year, due mainly to the negative impact from the COVID-19 pandemic which resulted in significantly higher inventory reserves and overall deleveraging of expenses. - Operating margin for the Company’s Licensing segment increased 510 basis points to 91.8% in fiscal 2021, from 86.7% in the prior year, due to lower expenses.
Other expense, net, was
Outlook
Given the current circumstances regarding the COVID-19 crisis and its uncertain impact on our operations, we are not providing detailed guidance for the first quarter or the full fiscal year ending
Fiscal 2025 Strategic Plan Update
The five-year strategic plan that the Company presented in
Please refer to the Company’s presentation materials (to be posted concurrently with the issuance of this earnings release) available at www.guess.com via the “Investor Relations” link. Those listening to today’s investor conference call are encouraged to refer to the presentation materials during the call.
Dividend
The Company’s Board of Directors has approved a quarterly cash dividend of
Presentation of Non-GAAP Information
The financial information presented in this release includes non-GAAP financial measures such as adjusted results, constant currency financial information, free cash flows and return on invested capital. For the three months and fiscal year ended
The Company has excluded these items from its adjusted financial measures primarily because it believes these items are not indicative of the underlying performance of its business and that the adjusted financial information provided is useful for investors to evaluate the comparability of the Company’s operating results and its future outlook (when reviewed in conjunction with the Company’s GAAP financial statements). A reconciliation of reported GAAP results to comparable non-GAAP results is provided in the accompanying tables.
This release also 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
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 (i) purchases of property and equipment and (ii) payments for property and equipment under finance leases. Free cash flows are not intended to be an alternative to cash flows from operating activities as a measure of liquidity, but rather to provide additional visibility to investors regarding how much cash is generated for discretionary and non-discretionary items after deducting purchases of property and equipment and payments for property and equipment under finance leases. 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.
The Company also includes information regarding its return on invested capital (or “ROIC”) in this release. The Company defines ROIC as adjusted net operating profit after taxes divided by two-year average invested capital. The Company believes that ROIC is a useful financial measure for investors in evaluating how efficiently the Company deploys its capital. The Company’s method of calculating ROIC may differ from other companies’ methods and therefore might not be comparable.
Investor Conference Call
The Company will hold a conference call at
About Guess?
Guess?, Inc. designs, markets, distributes and licenses a lifestyle collection of contemporary apparel, denim, handbags, watches, eyewear, 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
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 potential actions and impacts related to the COVID-19 pandemic; statements concerning the Company’s future outlook, including with respect to the first quarter and full year of fiscal 2022 and the Company’s fiscal 2025 strategic plan; statements concerning the Company’s expectations, goals, future prospects, global cost reduction opportunities and profitability efforts, capital allocation plans, cash needs and current business strategies and strategic initiatives; and statements expressing optimism or pessimism about future operating results, growth opportunities, earnings, and operating margins 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,” “could,” “will,” “should,” “goal,” “strategy,” “believe,” “estimate,” “continue,” “outlook,” “plan,” “create,” “see,” 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 or political conditions, including economic and other events that could negatively impact consumer confidence and discretionary consumer spending; the continuation or worsening of impacts related to the COVID-19 pandemic, including business, financial, human capital, litigation and other impacts to the Company and its partners; our ability to successfully negotiate rent relief or other lease-related terms with our landlords; our ability to successfully negotiate or defer our vendor obligations; our ability to maintain adequate levels of liquidity; changes to estimates related to impairments, inventory and other reserves, including the impact of the CARES Act, which were made using the best information available at the time; changes in the competitive marketplace and in our commercial relationships; our ability to anticipate and adapt to changing 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; unexpected or unseasonable weather conditions; our ability to effectively operate our various retail concepts, including securing, renewing, modifying or terminating leases for store locations; our ability to successfully and/or timely implement our growth strategies and other strategic initiatives; our ability to successfully implement or update information technology systems, including enhancing our global omni-channel capabilities; our ability to expand internationally and operate in regions where we have less experience, including through joint ventures; risks related to our convertible senior notes issued in
Guess?, Inc. and Subsidiaries |
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Condensed Consolidated Statements of Income (Loss) |
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(amounts in thousands, except per share data) |
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Three Months Ended |
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Fiscal Year Ended |
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$ |
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% |
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$ |
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% |
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$ |
|
% |
|
$ |
|
% |
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Product sales |
$ |
618,973 |
|
|
95.5 |
% |
|
$ |
815,975 |
|
|
96.9 |
% |
|
$ |
1,802,533 |
|
|
96.1 |
% |
|
$ |
2,592,262 |
|
|
96.8 |
% |
||||
Net royalties |
29,482 |
|
|
4.5 |
% |
|
26,279 |
|
|
3.1 |
% |
|
73,996 |
|
|
3.9 |
% |
|
85,847 |
|
|
3.2 |
% |
||||||||
Net revenue |
648,455 |
|
|
100.0 |
% |
|
842,254 |
|
|
100.0 |
% |
|
1,876,529 |
|
|
100.0 |
% |
|
2,678,109 |
|
|
100.0 |
% |
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|
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Cost of product sales |
372,130 |
|
|
57.4 |
% |
|
503,660 |
|
|
59.8 |
% |
|
1,179,427 |
|
|
62.9 |
% |
|
1,662,401 |
|
|
62.1 |
% |
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Gross profit |
276,325 |
|
|
42.6 |
% |
|
338,594 |
|
|
40.2 |
% |
|
697,102 |
|
|
37.1 |
% |
|
1,015,708 |
|
|
37.9 |
% |
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Selling, general and administrative expenses |
201,638 |
|
|
31.1 |
% |
|
237,237 |
|
|
28.1 |
% |
|
679,958 |
|
|
36.1 |
% |
|
865,060 |
|
|
32.2 |
% |
||||||||
Asset impairment charges |
5,166 |
|
|
0.8 |
% |
|
4,851 |
|
|
0.6 |
% |
|
80,442 |
|
|
4.3 |
% |
|
9,977 |
|
|
0.4 |
% |
||||||||
Net gains on lease modifications |
(2,351 |
) |
|
(0.4 |
%) |
|
— |
|
|
— |
% |
|
(2,801 |
) |
|
(0.1 |
%) |
|
— |
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|
— |
% |
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Earnings (loss) from operations |
71,872 |
|
|
11.1 |
% |
|
96,506 |
|
|
11.5 |
% |
|
(60,497 |
) |
|
(3.2 |
%) |
|
140,671 |
|
|
5.3 |
% |
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Other income (expense): |
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|
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Interest expense |
(5,657 |
) |
|
(0.9 |
%) |
|
(4,973 |
) |
|
(0.6 |
%) |
|
(22,869 |
) |
|
(1.2 |
%) |
|
(16,129 |
) |
|
(0.6 |
%) |
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Interest income |
629 |
|
|
0.1 |
% |
|
563 |
|
|
0.1 |
% |
|
2,237 |
|
|
0.1 |
% |
|
1,729 |
|
|
0.1 |
% |
||||||||
Other income (expense), net |
14,603 |
|
|
2.3 |
% |
|
1,817 |
|
|
0.2 |
% |
|
(5,950 |
) |
|
(0.3 |
%) |
|
(2,529 |
) |
|
(0.2 |
%) |
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Earnings (loss) before Income tax expense (benefit) |
81,447 |
|
|
12.6 |
% |
|
93,913 |
|
|
11.2 |
% |
|
(87,079 |
) |
|
(4.6 |
%) |
|
123,742 |
|
|
4.6 |
% |
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Income tax expense (benefit) |
8,512 |
|
|
1.4 |
% |
|
11,864 |
|
|
1.5 |
% |
|
(6,338 |
) |
|
(0.3 |
%) |
|
22,513 |
|
|
0.8 |
% |
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Net earnings (loss) |
72,935 |
|
|
11.2 |
% |
|
82,049 |
|
|
9.7 |
% |
|
(80,741 |
) |
|
(4.3 |
%) |
|
101,229 |
|
|
3.8 |
% |
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Net earnings attributable to noncontrolling interests |
2,516 |
|
|
0.3 |
% |
|
2,445 |
|
|
0.2 |
% |
|
488 |
|
|
0.0 |
% |
|
5,254 |
|
|
0.2 |
% |
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Net earnings (loss) attributable to Guess?, Inc. |
$ |
70,419 |
|
|
10.9 |
% |
|
$ |
79,604 |
|
|
9.5 |
% |
|
$ |
(81,229 |
) |
|
(4.3 |
%) |
|
$ |
95,975 |
|
|
3.6 |
% |
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Net earnings (loss) per common share attributable to common stockholders: |
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Basic |
$ |
1.10 |
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|
$ |
1.21 |
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|
$ |
(1.27 |
) |
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|
$ |
1.35 |
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Diluted |
$ |
1.07 |
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|
$ |
1.18 |
|
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|
$ |
(1.27 |
) |
|
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|
$ |
1.33 |
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Weighted average common shares outstanding attributable to common stockholders: |
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Basic |
63,033 |
|
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|
|
65,019 |
|
|
|
|
64,179 |
|
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|
70,461 |
|
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|
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Diluted |
65,003 |
|
|
|
|
66,653 |
|
|
|
|
64,179 |
|
|
|
|
71,669 |
|
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Effective income tax rate |
10.5 |
% |
|
|
12.6 |
% |
|
|
7.3 |
% |
|
|
18.2 |
% |
|
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Adjusted selling, general and administrative expenses1: |
$ |
202,117 |
|
|
31.2 |
% |
|
$ |
236,919 |
|
|
28.1 |
% |
|
$ |
677,110 |
|
|
36.0 |
% |
|
$ |
865,479 |
|
|
32.3 |
% |
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Adjusted earnings from operations1: |
$ |
74,208 |
|
|
11.4 |
% |
|
$ |
101,675 |
|
|
12.1 |
% |
|
$ |
19,992 |
|
|
1.1 |
% |
|
$ |
150,229 |
|
|
5.6 |
% |
||||
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Adjusted net earnings (loss) attributable to Guess?, Inc.1: |
$ |
77,668 |
|
|
12.0 |
% |
|
$ |
82,336 |
|
|
9.8 |
% |
|
$ |
(4,521 |
) |
|
(0.2 |
%) |
|
$ |
105,036 |
|
|
3.9 |
% |
||||
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Adjusted diluted earnings (loss) per common share attributable to common stockholders1: |
$ |
1.18 |
|
|
|
|
$ |
1.22 |
|
|
|
|
$ |
(0.07 |
) |
|
|
|
$ |
1.45 |
|
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|
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Adjusted effective income tax rate1: |
7.2 |
% |
|
|
16.5 |
% |
|
|
206.0 |
% |
|
|
21.7 |
% |
|
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______________________________________________________________________ |
1 |
The adjusted results for the three months and fiscal year ended |
Guess?, Inc. and Subsidiaries |
Reconciliation of GAAP Results to Adjusted Results |
(dollars in thousands) |
The following table provides reconciliations of reported GAAP selling, general and administrative expenses to adjusted selling, general and administrative expenses, reported GAAP earnings (loss) from operations to adjusted earnings from operations, reported GAAP net earnings (loss) attributable to Guess?, Inc. to adjusted net earnings (loss) attributable to Guess?, Inc. and reported GAAP income tax expense (benefit) to adjusted income tax expense for the three months and fiscal year ended
|
Three Months Ended |
|
Fiscal Year Ended |
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Reported GAAP selling, general and administrative expenses |
$ |
201,638 |
|
|
|
$ |
237,237 |
|
|
|
$ |
679,958 |
|
|
|
$ |
865,060 |
|
|
Certain professional service, legal fees and related net credits1 |
509 |
|
|
|
120 |
|
|
|
565 |
|
|
|
857 |
|
|
||||
Separation charges2 |
(30 |
) |
|
|
(438 |
) |
|
|
(3,413 |
) |
|
|
(438 |
) |
|
||||
|
|
|
|
|
|
|
|
||||||||||||
Adjusted selling, general and administrative expenses |
$ |
202,117 |
|
|
|
$ |
236,919 |
|
|
|
$ |
677,110 |
|
|
|
$ |
865,479 |
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reported GAAP earnings (loss) from operations |
$ |
71,872 |
|
|
|
$ |
96,506 |
|
|
|
$ |
(60,497 |
) |
|
|
$ |
140,671 |
|
|
Certain professional service, legal fees and related net credits1 |
(509 |
) |
|
|
(120 |
) |
|
|
(565 |
) |
|
|
(857 |
) |
|
||||
Separation charges2 |
30 |
|
|
|
438 |
|
|
|
3,413 |
|
|
|
438 |
|
|
||||
Asset impairment charges3 |
5,166 |
|
|
|
4,851 |
|
|
|
80,442 |
|
|
|
9,977 |
|
|
||||
Net gains on lease modifications4 |
(2,351 |
) |
|
|
— |
|
|
|
(2,801 |
) |
|
|
— |
|
|
||||
|
|
|
|
|
|
|
|
||||||||||||
Adjusted earnings from operations |
$ |
74,208 |
|
|
|
$ |
101,675 |
|
|
|
$ |
19,992 |
|
|
|
$ |
150,229 |
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reported GAAP net earnings (loss) attributable to Guess?, Inc. |
$ |
70,419 |
|
|
|
$ |
79,604 |
|
|
|
$ |
(81,229 |
) |
|
|
$ |
95,975 |
|
|
Certain professional service, legal fees and related net credits1 |
(509 |
) |
|
|
(120 |
) |
|
|
(565 |
) |
|
|
(857 |
) |
|
||||
Separation charges2 |
30 |
|
|
|
438 |
|
|
|
3,413 |
|
|
|
438 |
|
|
||||
Asset impairment charges3 |
5,166 |
|
|
|
4,851 |
|
|
|
80,442 |
|
|
|
9,977 |
|
|
||||
Net gains on lease modifications4 |
(2,351 |
) |
|
|
— |
|
|
|
(2,801 |
) |
|
|
— |
|
|
||||
Amortization of debt discount5 |
2,598 |
|
|
|
2,449 |
|
|
|
10,394 |
|
|
|
7,558 |
|
|
||||
Discrete tax adjustments6 |
3,248 |
|
|
|
— |
|
|
|
4,053 |
|
|
|
— |
|
|
||||
Income tax impact from adjustments7 |
(933 |
) |
|
|
(4,886 |
) |
|
|
(18,228 |
) |
|
|
(8,055 |
) |
|
||||
|
|
|
|
|
|
|
|
||||||||||||
Total adjustments affecting net earnings (loss) attributable to Guess?, Inc. |
7,249 |
|
|
|
2,732 |
|
|
|
76,708 |
|
|
|
9,061 |
|
|
||||
|
|
|
|
|
|
|
|
||||||||||||
Adjusted net earnings (loss) attributable to Guess?, Inc. |
$ |
77,668 |
|
|
|
$ |
82,336 |
|
|
|
$ |
(4,521 |
) |
|
|
$ |
105,036 |
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reported GAAP income tax expense (benefit) |
$ |
8,512 |
|
|
|
$ |
11,864 |
|
|
|
$ |
(6,338 |
) |
|
|
$ |
22,513 |
|
|
Discrete tax adjustments6 |
(3,248 |
) |
|
|
— |
|
|
|
(4,053 |
) |
|
|
— |
|
|
||||
Income tax impact from adjustments7 |
933 |
|
|
|
4,886 |
|
|
|
18,228 |
|
|
|
8,055 |
|
|
||||
|
|
|
|
|
|
|
|
||||||||||||
Adjusted income tax expense |
$ |
6,197 |
|
|
|
$ |
16,750 |
|
|
|
$ |
7,837 |
|
|
|
$ |
30,568 |
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted effective income tax rate |
7.2 |
% |
|
16.5 |
% |
|
206.0 |
% |
|
21.7 |
% |
||||||||
______________________________________________________________________ |
1 |
During the three months and fiscal year ended |
|
2 |
During the fiscal year ended |
|
3 |
During the three months and fiscal year ended |
|
4 |
During the three months and fiscal year ended |
|
5 |
In |
|
6 |
During the three months and fiscal year ended |
|
7 |
The income tax effect of certain professional service, legal fees and related net credits, separation charges, asset impairment charges, net gains on lease modifications and the amortization of debt discount was based on the Company’s assessment of deductibility using the statutory tax rate (inclusive of the impact of valuation allowances) of the tax jurisdiction in which the charges were incurred. The income tax adjustment for the fiscal year ended |
Guess?, Inc. and Subsidiaries |
|||||||||||||||||||||
Consolidated Segment Data |
|||||||||||||||||||||
(dollars in thousands) |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended |
|
Fiscal Year Ended |
||||||||||||||||||
|
|
|
|
|
%
|
|
|
|
|
|
%
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue: |
|
|
|
|
|
|
|
||||||||||||||
Americas Retail |
$ |
195,829 |
|
|
$ |
258,334 |
|
|
(24 |
%) |
|
$ |
510,806 |
|
|
$ |
811,547 |
|
|
(37 |
%) |
Americas Wholesale |
35,476 |
|
|
41,884 |
|
|
(15 |
%) |
|
117,607 |
|
|
186,389 |
|
|
(37 |
%) |
||||
|
307,648 |
|
|
420,297 |
|
|
(27 |
%) |
|
941,546 |
|
|
1,248,114 |
|
|
(25 |
%) |
||||
|
80,020 |
|
|
95,460 |
|
|
(16 |
%) |
|
232,574 |
|
|
346,212 |
|
|
(33 |
%) |
||||
Licensing |
29,482 |
|
|
26,279 |
|
|
12 |
% |
|
73,996 |
|
|
85,847 |
|
|
(14 |
%) |
||||
Total net revenue |
$ |
648,455 |
|
|
$ |
842,254 |
|
|
(23 |
%) |
|
$ |
1,876,529 |
|
|
$ |
2,678,109 |
|
|
(30 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) from operations: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Americas Retail |
$ |
25,128 |
|
|
$ |
16,533 |
|
|
52 |
% |
|
$ |
(15,776 |
) |
|
$ |
22,279 |
|
|
(171 |
%) |
Americas Wholesale |
8,353 |
|
|
8,222 |
|
|
2 |
% |
|
19,912 |
|
|
35,674 |
|
|
(44 |
%) |
||||
|
38,925 |
|
|
79,336 |
|
|
(51 |
%) |
|
66,790 |
|
|
134,078 |
|
|
(50 |
%) |
||||
|
3,971 |
|
|
1,541 |
|
|
158 |
% |
|
(20,758 |
) |
|
(8,894 |
) |
|
(133 |
%) |
||||
Licensing |
28,105 |
|
|
22,896 |
|
|
23 |
% |
|
67,938 |
|
|
74,459 |
|
|
(9 |
%) |
||||
Total segment earnings from operations |
104,482 |
|
|
128,528 |
|
|
(19 |
%) |
|
118,106 |
|
|
257,596 |
|
|
(54 |
%) |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate overhead |
(29,795 |
) |
|
(27,171 |
) |
|
10 |
% |
|
(100,962 |
) |
|
(106,948 |
) |
|
(6 |
%) |
||||
Asset impairment charges |
(5,166 |
) |
|
(4,851 |
) |
|
6 |
% |
|
(80,442 |
) |
|
(9,977 |
) |
|
706 |
% |
||||
Net gains on lease modifications |
2,351 |
|
|
— |
|
|
|
|
2,801 |
|
|
— |
|
|
|
||||||
Total earnings (loss) from operations |
$ |
71,872 |
|
|
$ |
96,506 |
|
|
(26 |
%) |
|
$ |
(60,497 |
) |
|
$ |
140,671 |
|
|
(143 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating margins: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Americas Retail |
12.8 |
% |
|
6.4 |
% |
|
|
|
(3.1 |
%) |
|
2.7 |
% |
|
|
||||||
Americas Wholesale |
23.5 |
% |
|
19.6 |
% |
|
|
|
16.9 |
% |
|
19.1 |
% |
|
|
||||||
|
12.7 |
% |
|
18.9 |
% |
|
|
|
7.1 |
% |
|
10.7 |
% |
|
|
||||||
|
5.0 |
% |
|
1.6 |
% |
|
|
|
(8.9 |
%) |
|
(2.6 |
%) |
|
|
||||||
Licensing |
95.3 |
% |
|
87.1 |
% |
|
|
|
91.8 |
% |
|
86.7 |
% |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP operating margin for total Company |
11.1 |
% |
|
11.5 |
% |
|
|
|
(3.2 |
%) |
|
5.3 |
% |
|
|
||||||
Certain professional service, legal fees and related net credits |
(0.1 |
%) |
|
(0.0 |
%) |
|
|
|
(0.0 |
%) |
|
(0.1 |
%) |
|
|
||||||
Separation charges |
0.0 |
% |
|
0.0 |
% |
|
|
|
0.1 |
% |
|
0.0 |
% |
|
|
||||||
Asset impairment charges |
0.8 |
% |
|
0.6 |
% |
|
|
|
4.3 |
% |
|
0.4 |
% |
|
|
||||||
Net gains on lease modifications |
(0.4 |
%) |
|
— |
% |
|
|
|
(0.1 |
%) |
|
— |
% |
|
|
||||||
Adjusted operating margin for total Company |
11.4 |
% |
|
12.1 |
% |
|
|
|
1.1 |
% |
|
5.6 |
% |
|
|
||||||
Guess?, Inc. and Subsidiaries |
||||||||||||||||||||||
Constant Currency Financial Measures |
||||||||||||||||||||||
(dollars in thousands) |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Three Months Ended |
|
|
|
|
|||||||||||||||||
|
|
|
|
|
% change |
|||||||||||||||||
|
As Reported |
|
Foreign
|
|
Constant
|
|
As Reported |
|
As
|
|
Constant
|
|||||||||||
Net revenue: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Americas Retail |
$ |
195,829 |
|
|
$ |
463 |
|
|
|
$ |
196,292 |
|
|
$ |
258,334 |
|
|
(24 |
%) |
|
(24 |
%) |
Americas Wholesale |
35,476 |
|
|
508 |
|
|
|
35,984 |
|
|
41,884 |
|
|
(15 |
%) |
|
(14 |
%) |
||||
|
307,648 |
|
|
(21,164 |
) |
|
|
286,484 |
|
|
420,297 |
|
|
(27 |
%) |
|
(32 |
%) |
||||
|
80,020 |
|
|
(4,365 |
) |
|
|
75,655 |
|
|
95,460 |
|
|
(16 |
%) |
|
(21 |
%) |
||||
Licensing |
29,482 |
|
|
— |
|
|
|
29,482 |
|
|
26,279 |
|
|
12 |
% |
|
12 |
% |
||||
Total net revenue |
$ |
648,455 |
|
|
$ |
(24,558 |
) |
|
|
$ |
623,897 |
|
|
$ |
842,254 |
|
|
(23 |
%) |
|
(26 |
%) |
|
Fiscal Year Ended |
|
|
|
|
|||||||||||||||||
|
|
|
|
|
% change |
|||||||||||||||||
|
As Reported |
|
Foreign Currency Impact |
|
Constant Currency |
|
As Reported |
|
As Reported |
|
Constant Currency |
|||||||||||
Net revenue: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Americas Retail |
$ |
510,806 |
|
|
$ |
3,132 |
|
|
|
$ |
513,938 |
|
|
$ |
811,547 |
|
|
(37 |
%) |
|
(37 |
%) |
Americas Wholesale |
117,607 |
|
|
3,910 |
|
|
|
121,517 |
|
|
186,389 |
|
|
(37 |
%) |
|
(35 |
%) |
||||
|
941,546 |
|
|
(33,144 |
) |
|
|
908,402 |
|
|
1,248,114 |
|
|
(25 |
%) |
|
(27 |
%) |
||||
|
232,574 |
|
|
(3,428 |
) |
|
|
229,146 |
|
|
346,212 |
|
|
(33 |
%) |
|
(34 |
%) |
||||
Licensing |
73,996 |
|
|
— |
|
|
|
73,996 |
|
|
85,847 |
|
|
(14 |
%) |
|
(14 |
%) |
||||
Total net revenue |
$ |
1,876,529 |
|
|
$ |
(29,530 |
) |
|
|
$ |
1,846,999 |
|
|
$ |
2,678,109 |
|
|
(30 |
%) |
|
(31 |
%) |
Guess?, Inc. and Subsidiaries |
|||||||
Selected Condensed Consolidated Balance Sheet Data |
|||||||
(in thousands) |
|||||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
ASSETS |
|||||||
|
|
|
|
||||
Cash and cash equivalents |
$ |
469,110 |
|
|
$ |
284,613 |
|
|
|
|
|
||||
Receivables, net |
314,147 |
|
|
327,281 |
|
||
|
|
|
|
||||
Inventories |
389,144 |
|
|
393,129 |
|
||
|
|
|
|
||||
Other current assets |
60,123 |
|
|
59,212 |
|
||
|
|
|
|
||||
Property and equipment, net |
216,196 |
|
|
288,112 |
|
||
|
|
|
|
||||
Restricted cash |
235 |
|
|
215 |
|
||
|
|
|
|
||||
Operating lease right-of-use assets |
764,804 |
|
|
851,990 |
|
||
|
|
|
|
||||
Other assets |
252,109 |
|
|
224,410 |
|
||
|
|
|
|
||||
Total assets |
$ |
2,465,868 |
|
|
$ |
2,428,962 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|||||||
|
|
|
|
||||
Current portion of borrowings and finance lease obligations |
$ |
38,710 |
|
|
$ |
9,490 |
|
|
|
|
|
||||
Current operating lease liabilities |
222,800 |
|
|
192,066 |
|
||
|
|
|
|
||||
Other current liabilities |
501,029 |
|
|
436,857 |
|
||
|
|
|
|
||||
Long-term debt and finance lease obligations |
68,554 |
|
|
32,770 |
|
||
|
|
|
|
||||
Convertible senior notes, net |
258,614 |
|
|
247,363 |
|
||
|
|
|
|
||||
Long-term operating lease liabilities |
662,657 |
|
|
714,079 |
|
||
|
|
|
|
||||
Other long-term liabilities |
144,004 |
|
|
130,259 |
|
||
|
|
|
|
||||
Redeemable and nonredeemable noncontrolling interests |
25,837 |
|
|
26,364 |
|
||
|
|
|
|
||||
Guess?, Inc. stockholders’ equity |
543,663 |
|
|
639,714 |
|
||
|
|
|
|
||||
Total liabilities and stockholders’ equity |
$ |
2,465,868 |
|
|
$ |
2,428,962 |
|
Guess?, Inc. and Subsidiaries |
||||||||||
Condensed Consolidated Cash Flow Data |
||||||||||
(in thousands) |
||||||||||
|
|
|
|
|
||||||
|
|
Fiscal Year Ended |
||||||||
|
|
|
|
|
||||||
|
|
|
|
|
||||||
Net cash provided by operating activities |
|
$ |
209,050 |
|
|
|
$ |
197,913 |
|
|
|
|
|
|
|
||||||
Net cash used in investing activities |
|
(22,161 |
) |
|
|
(56,471 |
) |
|
||
|
|
|
|
|
||||||
Net cash used in financing activities |
|
(9,907 |
) |
|
|
(64,165 |
) |
|
||
|
|
|
|
|
||||||
Effect of exchange rates on cash, cash equivalents and restricted cash |
|
7,535 |
|
|
|
(3,444 |
) |
|
||
|
|
|
|
|
||||||
Net change in cash, cash equivalents and restricted cash |
|
184,517 |
|
|
|
73,833 |
|
|
||
|
|
|
|
|
||||||
Cash, cash equivalents and restricted cash at the beginning of the year |
|
284,828 |
|
|
|
210,995 |
|
|
||
|
|
|
|
|
||||||
Cash, cash equivalents and restricted cash at the end of the year |
|
$ |
469,345 |
|
|
|
$ |
284,828 |
|
|
|
|
|
|
|
||||||
Supplemental information: |
|
|
|
|
||||||
|
|
|
|
|
||||||
Depreciation and amortization |
|
$ |
63,501 |
|
|
|
$ |
72,188 |
|
|
|
|
|
|
|
||||||
Total lease costs (excluding finance lease cost) |
|
$ |
283,806 |
|
|
|
$ |
368,435 |
|
|
Guess?, Inc. and Subsidiaries |
|||||||||
Reconciliation of Net Cash Provided By Operating Activities to Free Cash Flow |
|||||||||
(in thousands) |
|||||||||
|
|
|
|
||||||
|
Fiscal Year Ended |
||||||||
|
|
|
|
||||||
|
|
|
|
||||||
Net cash provided by operating activities |
$ |
209,050 |
|
|
|
$ |
197,913 |
|
|
|
|
|
|
||||||
Less: Purchases of property and equipment |
(18,876 |
) |
|
|
(61,868 |
) |
|
||
|
|
|
|
||||||
Less: Payments for property and equipment under finance leases |
(7,131 |
) |
|
|
(2,733 |
) |
|
||
|
|
|
|
||||||
Free cash flow |
$ |
183,043 |
|
|
|
$ |
133,312 |
|
|
Guess?, Inc. and Subsidiaries |
|||||||||||
Retail Store Data |
|||||||||||
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
||||||||||
|
Stores |
|
Concessions |
||||||||
Region |
Total |
|
Directly
|
|
Partner
|
|
Total |
|
Directly
|
|
Partner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
251 |
|
249 |
|
2 |
|
1 |
|
— |
|
1 |
|
76 |
|
76 |
|
— |
|
— |
|
— |
|
— |
Central and |
105 |
|
70 |
|
35 |
|
27 |
|
27 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
432 |
|
395 |
|
37 |
|
28 |
|
27 |
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
725 |
|
507 |
|
218 |
|
44 |
|
44 |
|
— |
|
413 |
|
144 |
|
269 |
|
304 |
|
101 |
|
203 |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
1,570 |
|
1,046 |
|
524 |
|
376 |
|
172 |
|
204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
||||||||||
|
Stores |
|
Concessions |
||||||||
Region |
Total |
|
Directly
|
|
Partner
|
|
Total |
|
Directly
|
|
Partner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
282 |
|
280 |
|
2 |
|
1 |
|
— |
|
1 |
|
80 |
|
80 |
|
— |
|
— |
|
— |
|
— |
Central and |
113 |
|
73 |
|
40 |
|
27 |
|
27 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
475 |
|
433 |
|
42 |
|
28 |
|
27 |
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
745 |
|
517 |
|
228 |
|
39 |
|
39 |
|
— |
|
509 |
|
219 |
|
290 |
|
327 |
|
117 |
|
210 |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
1,729 |
|
1,169 |
|
560 |
|
394 |
|
183 |
|
211 |
Guess?, Inc. and Subsidiaries |
|||||||||||||||||||||||||||||
Return on |
|||||||||||||||||||||||||||||
(in thousands) |
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
FY2019 |
|
FY2020 |
|
FY2020
|
|
FY2024E |
|
FY2025E |
|
FY2025E
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Total assets1 |
$ |
1,649,205 |
|
|
|
$ |
2,428,962 |
|
|
|
$ |
2,039,084 |
|
|
|
$ |
2,918,000 |
|
|
|
$ |
2,829,000 |
|
|
|
$ |
2,873,500 |
|
|
Less: cash and cash equivalents |
(210,460 |
) |
|
|
(284,613 |
) |
|
|
(247,537 |
) |
|
|
(786,000 |
) |
|
|
(675,000 |
) |
|
|
(730,500 |
) |
|
||||||
Less: Operating right-of-use assets1 |
— |
|
|
|
(851,990 |
) |
|
|
(425,995 |
) |
|
|
(764,000 |
) |
|
|
(768,000 |
) |
|
|
(766,000 |
) |
|
||||||
Less: Accounts payable |
(286,657 |
) |
|
|
(232,761 |
) |
|
|
(259,709 |
) |
|
|
(346,000 |
) |
|
|
(354,000 |
) |
|
|
(350,000 |
) |
|
||||||
Less: Accrued expenses |
(252,392 |
) |
|
|
(204,096 |
) |
|
|
(228,244 |
) |
|
|
(209,000 |
) |
|
|
(210,000 |
) |
|
|
(209,500 |
) |
|
||||||
Add: Accrual for |
45,619 |
|
|
|
— |
|
|
|
22,809 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
||||||
Average invested capital |
$ |
945,315 |
|
|
|
$ |
855,502 |
|
|
|
$ |
900,408 |
|
|
|
$ |
813,000 |
|
|
|
$ |
822,000 |
|
|
|
$ |
817,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
FY2020 |
|
|
|
|
|
FY2025E |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Adjusted earnings from operations3 |
|
|
|
|
$ |
150,229 |
|
|
|
|
|
|
|
$ |
290,000 |
|
|
||||||||||||
Less: Asset impairments |
|
|
|
|
(9,977 |
) |
|
|
|
|
|
|
— |
|
|
||||||||||||||
Less: Other income (expense), net |
|
|
|
|
(2,529 |
) |
|
|
|
|
|
|
(1,400 |
) |
|
||||||||||||||
Less: Income tax expense4 |
|
|
|
|
(29,886 |
) |
|
|
|
|
|
|
(72,150 |
) |
|
||||||||||||||
Adjusted net operating profit after taxes |
|
|
|
|
$ |
107,837 |
|
|
|
|
|
|
|
$ |
216,450 |
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Non-GAAP return on invested capital5 |
|
|
|
|
12% |
|
|
|
|
|
26% |
||||||||||||||||||
______________________________________________________________________ |
1 |
|
During fiscal year 2020, the Company adopted a comprehensive new lease standard which superseded previous lease guidance. The standard requires a lessee to recognize an asset related to the right to use the underlying asset and a liability that approximates the present value of the lease payments over the term of contracts that qualify as leases under the new guidance. The adoption of the standard resulted in the recording of operating lease right-of-use assets and operating lease liabilities. |
2 |
|
During fiscal year 2019, the Company recognized a charge of €39.8 million ( |
3 |
|
The adjusted earnings from operations for fiscal year 2020 reflect the exclusion of certain items which the Company believes are not indicative of the underlying performance of its business. Refer to the “Reconciliation of GAAP Results to Adjusted Results” table above. |
4 |
|
Income taxes are calculated using the adjusted effective income tax rate for fiscal year 2020 of 21.7% and a projection of 25% for the fiscal 2025 effective income tax rate. |
5 |
|
The Company defines return on invested capital (or "ROIC") as adjusted net operating profit after taxes divided by two-year average invested capital. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210331005847/en/
Guess?, Inc.
Fabrice Benarouche
VP, Finance and Investor Relations
(213) 765-5578
Source: Guess?, Inc.