Provides Q4 EPS Guidance in the Range of $0.77 to $0.80
Provides Current Fiscal Year EPS Guidance in the Range of $2.45 to $2.48
- Global revenues reached $523 million, compared to $528 million last year
- Product margins improved across all business segments
- Operating margin reached 18.9% vs. 18.8% last year
- Cash increased to $345 million, compared to $237 million last year
Third Quarter Fiscal 2010 Results
For the third quarter of fiscal 2010, the Company reported record net earnings of
Mr. Marciano continued, "Our third quarter financial results exceeded our expectations. Each of our businesses performed better than expected in both revenues and earnings, as our customer continued to respond well to our product assortment in all markets around the world. In addition, we managed well, controlling our costs and inventories tightly to protect our profitability. This solid performance resulted in record third quarter earnings and a significant improvement in our cash flows in the period. There have been many challenges over the past year, and we responded well to them. As a result, we are a stronger company today. Through it all, we have remained true to our brand and focused on our customer, always delivering outstanding product and improving our service in our stores. We strongly believe that we are well positioned to achieve our objectives for growth and profitability."
Total net revenue for the third quarter of fiscal 2010 decreased 1.0% to
Net revenue from the Company's wholesale segment, which includes the Company's Asian operations, increased 10.0% to
As expected, net revenue from the Company's European segment decreased 9.3% to
Licensing segment net revenue decreased 0.4% to
Operating earnings for the third quarter of fiscal 2010 decreased 0.4% to
The Company's effective tax rate for the quarter was 33%, essentially flat to the prior year quarter.
Nine-Month Period Results
For the nine months ended
Total net revenue for the first nine months of fiscal 2010 decreased 3.0% to
Operating earnings for the first nine months of fiscal 2010 decreased 8.5% to
Outlook
The Company's expectations for the fourth quarter of fiscal 2010 ending
-
Consolidated net revenues are expected to range from
$585 million to$605 million . - Operating margin is expected to be around 18%.
- Diluted earnings per share are expected to be in the range of
$0.77 to$0.80 .
The Company's expectations for the full fiscal year ending
-
Consolidated net revenues are expected to range from
$2.07 billion to$2.09 billion . - Operating margin is expected to be around 16.5%.
- Diluted earnings per share are expected to range from
$2.45 to $2.48 .
Dividend
The Company also announced today that its Board of Directors has approved a quarterly cash dividend of
The Company will hold a conference call at
Except for historical information contained herein, certain matters discussed in this press release, including statements concerning the Company's future prospects and guidance for the fourth quarter and full year of fiscal 2010 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 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 other things, domestic and international economic conditions, including economic and other events that could negatively impact consumer confidence and discretionary consumer spending; our ability to, among other things, anticipate consumer preferences, effectively operate our various retail concepts, effectively manage inventories and successfully execute our strategies, including our supply chain and international growth strategies; and risks associated with changes in economic, political, social and other conditions affecting our foreign operations, including currency fluctuations. In addition to these factors, the economic, litigation-related and other risks identified in the Company's most recent annual report on Form 10-K and other filings with the
Contact:Guess?, Inc. Investor Relations (213) 765-5578
Guess?, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(amounts in thousands, except per share data)
Three Months Ended
------------------------------------
October 31, November 1,
2009 2008
$ % $ %
-------- ------ -------- ------
Net revenue
Product sales $494,998 94.7% $499,994 94.7%
Net royalties 27,814 5.3% 27,934 5.3%
-------- ------ -------- ------
522,812 100.0% 527,928 100.0%
Cost of product
sales 285,921 54.7% 286,116 54.2%
-------- ------ -------- ------
Gross profit 236,891 45.3% 241,812 45.8%
Selling,
general and
administrative
expenses 137,917 26.4% 142,432 27.0%
-------- ------ -------- ------
Earnings from
operations 98,974 18.9% 99,380 18.8%
Other income (expense):
Interest
expense (778) (0.1%) (1,706) (0.3%)
Interest
income 277 0.1% 2,000 0.4%
Other, net (1,340) (0.3%) (3,717) (0.7%)
-------- ------ -------- ------
Earnings before
income taxes 97,133 18.6% 95,957 18.2%
Income taxes 32,054 6.2% 31,721 6.0%
-------- ------ -------- ------
Net earnings 65,079 12.4% 64,236 12.2%
Net earnings
attributable to
noncontrolling
interests in
subsidiaries 1,009 0.1% 219 0.1%
-------- ------ -------- ------
Net earnings
attributable to
Guess?, Inc. $64,070 12.3% $64,017 12.1%
======== ====== ======== ======
Earnings per common
share attributable
to common
stockholders:
Basic (1) $0.69 $0.68
Diluted (1) $0.69 $0.67
Weighted average
common shares
outstanding
attributable
to common
stockholders:
Basic 90,941 92,438
Diluted (1) 91,778 93,140
Nine Months Ended
------------------------------------
October 31, November 1,
2009 2008
$ % $ %
-------- ------ -------- ------
Net revenue
Product sales $1,414,489 95.2% $1,454,685 94.9%
Net royalties 71,947 4.8% 77,635 5.1%
-------- ------ -------- ------
1,486,436 100.0% 1,532,320 100.0%
Cost of product
sales 840,265 56.5% 837,114 54.6%
-------- ------ -------- ------
Gross profit 646,171 43.5% 695,206 45.4%
Selling,
general and
administrative
expenses 408,049 27.5% 434,891 28.4%
-------- ------ -------- ------
Earnings from
operations 238,122 16.0% 260,315 17.0%
Other income (expense):
Interest
expense (1,723) (0.1%) (3,530) (0.2%)
Interest
income 1,461 0.1% 5,086 0.3%
Other, net (1,413) (0.1%) (5,349) (0.4%)
-------- ------ -------- ------
Earnings before
income taxes 236,447 15.9% 256,522 16.7%
Income taxes 78,028 5.2% 89,526 5.8%
-------- ------ -------- ------
Net earnings 158,419 10.7% 166,996 10.9%
Net earnings
attributable to
noncontrolling
interests in
subsidiaries 2,247 0.2% 1,346 0.1%
-------- ------ -------- ------
Net earnings
attributable to
Guess?, Inc. $156,172 10.5% $165,650 10.8%
======== ====== ======== ======
Earnings per common
share attributable
to common
stockholders:
Basic (1) $1.70 $1.75
Diluted (1) $1.68 $1.74
Weighted average
common shares
outstanding
attributable
to common
stockholders:
Basic 90,765 92,799
Diluted (1) 91,416 93,533
(1) The Company adopted a new accounting pronouncement in the first
quarter of fiscal 2010 that requires the Company to exclude certain
earnings and shares related to participating securities from the
computation of earnings per common share. The net earnings attributable
to participating securities were approximately $886 and $1,159 in the
third quarter of fiscal 2010 and fiscal 2009, respectively, and the
amount of participating shares for the same periods were 160 and 169,
respectively. The effect of the new accounting pronouncement on diluted
earnings per common share is to reduce the current quarter by
approximately $0.01 per share, reduce the prior year quarter by
approximately $0.02 per share and reduce both the current year-to-date
period and the prior year-to-date period by approximately $0.03 per
share. The prior year's earnings per share has been adjusted to reflect
the change.
Guess?, Inc. and Subsidiaries
Consolidated Segment Data
(dollars in thousands)
Three Months Ended Nine Months Ended
--------------------------- ---------------------------
October 31, November 1, % October 31, November 1, %
2009 2008 chg 2009 2008 chg
-------- -------- --- ---------- --------- ---
Net revenue:
Retail
operations $239,518 $235,074 2% $674,538 $689,371 -2%
Wholesale
operations 86,651 78,760 10% 215,265 226,257 -5%
European
operations 168,829 186,160 -9% 524,686 539,057 -3%
Licensing
operations 27,814 27,934 0% 71,947 77,635 -7%
-------- -------- ---------- ---------
$522,812 $527,928 -1% $1,486,436 $1,532,320 -3%
======== ======== ========== =========
Earnings (loss)
from operations:
Retail
operations $33,110 $27,378 21% $81,325 $80,358 1%
Wholesale
operations 17,717 13,839 28% 35,031 37,184 -6%
European
operations 40,801 49,541 -18% 116,233 129,628 -10%
Licensing
operations 24,176 24,075 0% 61,863 66,852 -7%
Corporate
overhead (16,830) (15,453) 9% (56,330) (53,707) 5%
-------- -------- ---------- ---------
$98,974 $99,380 0% $238,122 $260,315 -9%
======== ======== ========== =========
Operating margins:
Retail
operations 13.8% 11.6% 12.1% 11.7%
Wholesale
operations 20.4% 17.6% 16.3% 16.4%
European
operations 24.2% 26.6% 22.2% 24.0%
Licensing
operations 86.9% 86.2% 86.0% 86.1%
Total Company 18.9% 18.8% 16.0% 17.0%
Guess?, Inc. and Subsidiaries
Selected Condensed Consolidated Balance Sheet Data
(in thousands)
October 31, January 31, November 1,
2009 2009 2008
---------- ---------- ----------
ASSETS
Cash and cash equivalents $344,862 $294,118 $236,601
Receivables, net 318,472 262,349 299,653
Inventories 261,880 239,675 252,973
Other current assets 81,976 98,047 67,856
Property and equipment, net 254,259 221,416 243,704
Other assets 147,869 130,961 145,893
---------- ---------- ----------
Total Assets $1,409,318 $1,246,566 $1,246,680
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of borrowings
and capital lease obligations $2,577 $24,018 $45,555
Other current liabilities 300,700 311,866 300,573
Borrowing and capital lease
obligations 15,457 14,586 14,494
Other long-term liabilities 119,420 110,592 121,181
Redeemable and nonredeemable
noncontrolling interests 19,209 12,503 8,132
Guess?, Inc. stockholders'
equity 951,955 773,001 756,745
---------- ---------- ----------
Total Liabilities and
Stockholders' Equity $1,409,318 $1,246,566 $1,246,680
========== ========== ==========
Guess?, Inc. and Subsidiaries
Condensed Consolidated Cash Flow Data
(in thousands)
Nine Months Ended
-----------------------------
October 31, November 1,
2009 2008
-------- ---------
Net cash provided by operating activities $165,401 $93,447
Net cash used in investing activities (66,058) (82,435)
Net cash used in financing activities (54,356) (41,235)
Effect of exchange rates on cash 5,757 (8,771)
-------- ---------
Net increase (decrease) in cash and
cash equivalents 50,744 (38,994)
Cash and cash equivalents at the beginning
of the year 294,118 275,595
-------- ---------
Cash and cash equivalents at the end of
the period $344,862 $236,601
======== =========
Supplemental information:
Depreciation and amortization $47,093 $45,015
Rent 130,298 117,966
Guess?, Inc. and Subsidiaries
Retail Store Data
International Store Count
As of October 31, 2009
Directly
Total Operated
Stores Stores
-------- --------
Region
United States and Canada 433 433
Europe and Middle East 373 77
Asia 327 25
Other 53 13
-------- --------
1,186 548
======== ========
Guess?, Inc. and Subsidiaries
Retail Store Data
U.S. and Canada
Nine Months Ended
-----------------------------
October 31, November 1,
2009 2008
--------- -----------
Number of stores at the beginning of the year 425 373
Store openings 13 50
Store closures (5) (1)
--------- ---------
Number of stores at the end of the period 433 422
========= =========
Total store square footage at the end of
the period 1,992,000 1,944,000
========= =========
SOURCE
Guess?, Inc. Investor Relations, +1-213-765-5578