SEC Filing | Guess, Inc.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 5, 2007

GUESS?, INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

1-11893		95-3679695
(Commission File Number)		(IRS Employer Identification No.)

1444 S. Alameda Street Los Angeles, California 90021

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (213) 765-3100

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

Guess?, Inc. issued a press release on June 5, 2007. The press release announced its financial results for the quarter ended May 5, 2007 and the recasted quarterly results for the fiscal year ended February 3, 2007. The press release is attached hereto as Exhibit 99.1.

The information in this Form 8-K is being furnished under Item 2.02 and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

The following exhibit is furnished herewith:

99.1	Press Release of Guess?, Inc. dated June 5, 2007 (financial results for the quarter ended May 5, 2007 and the recasted quarterly results for the fiscal year ended February 3, 2007).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Guess?, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	GUESS?, INC.

Dated: June 5, 2007	By:	/s/ Carlos Alberini
		Carlos Alberini President and Chief Operating Officer

EXHIBIT INDEX

ExhibitNo.

Description

99.1

Press Release of Guess?, Inc. dated June 5, 2007 (financial results for the quarter ended May 5, 2007 and the recasted quarterly results for the fiscal year ended February 3, 2007)

Unassociated Document

GUESS?, INC.

NEWS RELEASE

*For Immediate Release*	Contacts:	Carlos Alberini
		President & Chief Operating Officer
		(213) 765-3582

		Dennis R. Secor
		SVP & Chief Financial Officer
		(213) 765-3289

		Joseph Teklits
		Integrated Corporate Relations
		(203) 682-8258

GUESS?, INC. REPORTS RECORD FIRST QUARTER REVENUES AND EARNINGS - RAISES FULL YEAR GUIDANCE AND DECLARES DIVIDEND

First Quarter 2008 Revenues Increased by 42%, to $378 Million

First Quarter 2008 EPS Increased by 65%, to $0.38 Versus $0.23 Last Year

Company Raises Fiscal Year EPS Guidance to a Range of $1.75 to $1.80, from a Range of $1.65 to $1.70

First Quarter Highlights

- Revenues grew 42.3% to $377.9 million

- North American comp sales up 13.6%

- Operating margin improved 240 basis points to 15.3%

- Net earnings grew 71.9% to $35.5 million

LOS ANGELES, June 5, 2007 - Guess?, Inc. (NYSE: GES) today reported financial results for the first quarter of its 2008 fiscal year, which ended May 5, 2007.

First Quarter 2008 Results

For the first quarter of fiscal 2008, the Company reported record net earnings of $35.5 million, an increase of 71.9% compared to net earnings of $20.7 million for the recast quarter ended April 29, 2006. Diluted earnings per share increased 65% to $0.38 per share in the current quarter versus $0.23 per share in the prior year quarter.

Paul Marciano, Chief Executive Officer, commented, “The strength of our brand and the solid execution of our global strategy have driven these record results, which represented our 15^th consecutive quarter of earnings growth. I am extremely pleased with our team’s outstanding performance. All of our businesses generated double digit revenue growth, led by strong execution in our international operations. In Europe, the addition of Focus Europe, our contemporary line, and the growth of our existing businesses drove a 77% sales increase in the segment. Strong sales performance in South Korea drove Asian revenues higher and led to a 77% increase in our wholesale segment revenues.”

Mr. Marciano continued, “Our North American retail business performed extremely well, posting its 17^th consecutive quarter of same store sales growth. And the strength of our accessory lines drove licensing revenue growth of 42%. It is important to note that our footwear licensee’s business has been expanding rapidly. Compared to just a year ago, their business has experienced explosive revenue growth, more than doubling its volume in the period. We continue to be very excited about the prospects of this business both domestically and internationally.”

Mr. Marciano concluded, “On a consolidated basis, we increased net earnings by 71.9%, driven by earnings growth in all of our businesses around the world. Our earnings were well balanced and our performance once again demonstrates the power of our diversified business model.”

Total net revenue for the first quarter of fiscal 2008 increased 42.3% to $377.9 million from $265.7 million in the prior-year period. The Company’s retail stores in the U.S. and Canada generated revenue of $179.5 million in the first quarter of fiscal 2008, a 19% increase from $150.9 million in the same period a year ago. Comparable store sales increased 13.6% for the quarter ended May 5, 2007, compared to the thirteen weeks ended May 6, 2006. The Company operated 336 retail stores in the U.S. and Canada at the end of the first quarter of fiscal 2008 versus 316 stores a year earlier.

Net revenue from the Company’s wholesale segment, which includes the Company’s Asian operations, increased 77.4% to $59.2 million in the first quarter of fiscal 2008, from $33.4 million in the prior-year period.

Net revenue from the Company’s European segment increased 77.2% to $118.9 million in the first quarter of fiscal 2008, compared to $67.1 million in the prior-year period.

Licensing segment net revenue increased 41.5% to $20.3 million in the first quarter of fiscal 2008, from $14.3 million in the prior-year period.

Operating earnings for the first quarter of fiscal 2008 increased 69.0% to $57.9 million from $34.3 million in the prior-year period. Operating margin in the first quarter improved 240 basis points to 15.3%, compared to the prior year’s quarter. This margin expansion was driven by better product margins, significant operating margin expansion in the wholesale segment, and the positive impact in the Company’s first quarter business mix of the higher European business. The Company’s SG&A rate increased 30 basis points quarter over quarter.

Five-Week Transition Period and Recast 2006 Financial Results

The Company also announced today the financial results for the five-week transition period ended February 3, 2007 and the results for the recast fourth quarter and year ended February 3, 2007. The five-week transition period resulted from the Company’s decision to change its fiscal year. For the five-week transition period, revenues were $136.0 million, net earnings were $8.0 million and diluted earnings per share were $0.09 on a post-split basis. This represents a $0.09 improvement over the diluted earnings per share reported in the year-ago January period.

For the recast quarter ended February 3, 2007, revenues were $396.2 million, operating earnings were $71.4 million, operating margin reached 18.0% and net earnings were $45.9 million. Diluted earnings per share for the recast fourth quarter ended February 3, 2007 were $0.49.

Revenues for the recast year ended February 3, 2007 were $1.25 billion, operating earnings were $205.5 million, operating margin reached 16.4% and net earnings were $131.2 million. Diluted earnings per share for the recast year ended February 3, 2007 were $1.42.

The quarterly and annual recast financial information for 2006 is included in today’s press release and is posted on the Company’s website under the “Investor’s Info” link.

Outlook

The Company’s expectations for the second quarter ending July 7, 2007, are as follows:

-	Consolidated net revenues are expected to range from $335 million to $345 million.

-	Operating margin is expected to be about 14%.

-	Diluted earnings per share are expected to be in the range of $0.31 to $0.33.

The Company’s expectations for the fiscal year ending February 2, 2008, are now as follows:

-	Consolidated net revenues are expected to range from $1.51 billion to $1.56 billion.

-	Operating margin is expected to be about 17.5%.

-	Diluted earnings per share are expected to be in the range of $1.75 to $1.80.

The fiscal year ending February 2, 2008 will include 52 weeks and a four-week January, compared to the recast year ended February 3, 2007, which included 53 weeks and a five-week January.

Dividend

The Company also announced today that its Board of Directors has declared a cash dividend of $0.06 per share on the Company’s common stock. The dividend will be payable on July 6, 2007 to shareholders of record at the close of business on June 20, 2007.

The Company will hold a conference call at 4:30 pm (ET) on June 5, 2007 to discuss the news announced in this press release. A live webcast of the conference call will be accessible at www.guessinc.com via the “Investor’s Info” link. The webcast will be archived on the website for 30 days.

Guess?, Inc. designs, markets, distributes and licenses a lifestyle collection of contemporary apparel, accessories and related consumer products. At May 5, 2007 the Company operated 336 retail stores in the United States and Canada. The Company also distributes its products through better department and specialty stores around the world. For more information about the Company, please visit www.guessinc.com.

Except for historical information contained herein, certain matters discussed in this press release, including statements concerning the Company’s future prospects and guidance for fiscal year 2008, 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 our ability to, among other things, anticipate consumer preferences, effectively operate our retail stores, effectively manage inventories, successfully execute our strategies, including our supply chain and international growth strategies, and domestic and international general economic conditions and consumer confidence. In addition to these factors, the economic and other factors 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.

Guess?, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(dollars in thousands, except per share data)

	Three Months Ended
	May 5,						April 29,
	2007						2006
	$			%			$			%

Net revenue
Product sales	$	357,643			94.6	%	$	251,337			94.6	%
Net royalties		20,306			5.4	%		14,346			5.4	%
		377,949			100.0	%		265,683			100.0	%

Cost of product sales		210,367			55.7	%		155,073			58.4	%

Gross profit		167,582			44.3	%		110,610			41.6	%

Selling, general and administrative expenses		109,648			29.0	%		76,333			28.7	%

Earnings from operations		57,934			15.3	%		34,277			12.9	%

Other (income) expense:
Interest expense		924			0.2	%		1,465			0.6	%
Interest income		(1,712	)		(0.5	%)		(1,227	)		(0.5	%)
Other, net		891			0.3	%		(297	)		(0.1	%)

Earnings before income taxes and minority interest		57,831			15.3	%		34,336			12.9	%

Income taxes		22,363			5.9	%		13,665			5.1	%
Minority interest		(59	)		(0.0	%)		---			---

Net earnings	$	35,527			9.4	%	$	20,671			7.8	%

Net earnings per share:

Basic	$	0.39					$	0.23

Diluted	$	0.38					$	0.23

Weighted number of shares outstanding:

Basic		91,886						90,146

Diluted		93,240						91,622

Guess?, Inc. and Subsidiaries

Consolidated Segment Data

(in thousands)

	Three Months Ended
	May 5,			April 29,			%
	2007			2006			chg

Net revenue:
Retail operations	$	179,529		$	150,861			19	%
Wholesale operations		59,195			33,360			77	%
European operations		118,919			67,116			77	%
Licensing operations		20,306			14,346			42	%
	$	377,949		$	265,683			42	%



Earnings (loss) from operations:
Retail operations	$	19,892		$	13,689			45	%
Wholesale operations		10,701			3,072			248	%
European operations		27,717			16,944			64	%
Licensing operations		17,357			11,888			46	%
Corporate overhead		(17,733	)		(11,316	)		57	%
	$	57,934		$	34,277			69	%


Operating margins:
Retail operations		11.1	%		9.1	%
Wholesale operations		18.1	%		9.2	%
European operations		23.3	%		25.2	%
Licensing operations		85.5	%		82.9	%
Total Company		15.3	%		12.9	%

Guess?, Inc. and Subsidiaries

Selected Condensed Consolidated Balance Sheet Data

(in thousands)

	May 5,		February 3,		April 29,
	2007		2007		2006

ASSETS

Cash and cash equivalents	$	189,396	$	207,617	$	155,533

Receivables, net		206,383		142,659		125,976

Inventories, net		164,500		173,668		108,241

Other current assets		39,373		39,523		34,166

Property and equipment, net		176,722		162,555		150,730

Other assets		126,412		117,300		97,026

Total Assets	$	902,786	$	843,322	$	671,672

LIABILITIES AND STOCKHOLDERS' EQUITY

Current installments of notes payable, long-term debt and capital lease	$	37,547	$	20,804	$	44,768

Other current liabilities		253,171		258,725		164,536

Notes payable, long-term debt and capital lease, excluding current installments		17,796		17,336		52,152

Other liabilities		103,328		103,126		88,420

Minority interest		4,548		4,607		---

Stockholders' equity		486,396		438,724		321,796

Total Liabilities and Stockholders' Equity	$	902,786	$	843,322	$	671,672

Guess?, Inc. and Subsidiaries

Condensed Consolidated Cash Flow Data

(in thousands)

	Three Months Ended
	May 5,			April 29,
	2007			2006


Net cash used in operating activities	$	(11,357	)	$	(17,726	)

Net cash used in investing activities		(24,867	)		(13,039	)

Net cash provided by financing activities		16,440			18,559

Effect of exchange rates on cash		1,563			545

Net increase in cash and cash equivalents		(18,221	)		(11,661	)

Cash and cash equivalents at the beginning of the year		207,617			167,194

Cash and cash equivalents at the end of the period	$	189,396		$	155,533



Supplemental information:

Depreciation and amortization	$	12,702		$	8,372

Rent		25,875			20,160

Guess?, Inc. and Subsidiaries

Retail Store Data

U.S. and Canada

	Three Months Ended
	May 5,			April 29,
	2007			2006


Number of stores at the beginning of the year		334			311

Store openings		8			9

Store closures		(6	)		(4	)

Number of stores at the end of the period		336			316

Total store square footage at the end of the period		1,603,000			1,553,000

Guess?, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(dollars in thousands, except per share data)

	Three Months Ended						Three Months Ended						Three Months Ended						Three Months Ended						Twelve Months Ended
	April 29,						July 29,						October 28,						February 3,						February 3,
	2006						2006						2006						2007						2007
	$			%			$			%			$			%			$			%			$			%

Net revenue
Product sales	$	251,337			94.6	%	$	247,685			94.6	%	$	311,914			94.9	%	$	374,592			94.5	%	$	1,185,528			94.6	%
Net royalties		14,346			5.4	%		14,264			5.4	%		16,902			5.1	%		21,624			5.5	%		67,136			5.4	%
		265,683			100.0	%		261,949			100.0	%		328,816			100.0	%		396,216			100.0	%		1,252,664			100.0	%

Cost of product sales		155,073			58.4	%		151,618			57.9	%		174,285			53.0	%		219,179			55.3	%		700,155			55.9	%

Gross profit		110,610			41.6	%		110,331			42.1	%		154,531			47.0	%		177,037			44.7	%		552,509			44.1	%

Selling, general and administrative expenses		76,333			28.7	%		76,683			29.3	%		88,366			26.9	%		105,608			26.7	%		346,990			27.6	%

Earnings from operations		34,277			12.9	%		33,648			12.8	%		66,165			20.1	%		71,429			18.0	%		205,519			16.4	%

Other (income) expense:
Interest expense		1,465			0.6	%		1,794			0.7	%		1,517			0.5	%		2,886			0.7	%		7,662			0.6	%
Interest income		(1,227	)		(0.5	%)		(1,494	)		(0.6	%)		(1,770	)		(0.6	%)		(1,748	)		(0.4	%)		(6,239	)		(0.5	%)
Other, net		(297	)		(0.1	%)		(827	)		(0.3	%)		(1,646	)		(0.5	%)		(1,890	)		(0.5	%)		(4,660	)		(0.4	%)

Earnings before income taxes and minority interest		34,336			12.9	%		34,175			13.0	%		68,064			20.7	%		72,181			18.2	%		208,756			16.7	%

Income taxes		13,665			5.1	%		13,652			5.1	%		23,963			7.3	%		26,335			6.6	%		77,615			6.2	%
Minority interest		---			---			(123	)		(0.0	%)		111			0.0	%		(19	)		(0.0	%)		(31	)		(0.0	%)

Net earnings	$	20,671			7.8	%	$	20,646			7.9	%	$	43,990			13.4	%	$	45,865			11.6	%	$	131,172			10.5	%

Net earnings per share:

Basic	$	0.23					$	0.23					$	0.48					$	0.50					$	1.44

Diluted	$	0.23					$	0.22					$	0.48					$	0.49					$	1.42

Weighted number of shares outstanding:

Basic		90,146						90,594						90,846						91,506						90,786

Diluted		91,622						91,936						92,250						92,892						92,222

Guess?, Inc. and Subsidiaries

Consolidated Segment Data

(in thousands)

	Three Months Ended			Three Months Ended			Three Months Ended			Three Months Ended			Twelve Months Ended
	Apr 29,			Jul 29,			Oct 28,			Feb 3,			Feb 3,
	2006			2006			2006			2007			2007
Net revenue:
Retail operations	$	150,861		$	166,095		$	178,834		$	245,314		$	741,104
Wholesale operations		33,360			32,824			43,939			42,500			152,623
European operations		67,116			48,766			89,141			86,778			291,801
Licensing operations		14,346			14,264			16,902			21,624			67,136
	$	265,683		$	261,949			328,816			396,216		$	1,252,664

Earnings (loss) from operations:
Retail operations	$	13,689		$	20,939		$	26,787		$	44,109		$	105,524
Wholesale operations		3,072			5,394			9,040			7,660			25,166
European operations		16,944			8,219			31,103			16,914			73,180
Licensing operations		11,888			13,232			13,115			20,421			58,656
Corporate overhead		(11,316	)		(14,136	)		(13,880	)		(17,675	)		(57,007	)
	$	34,277		$	33,648		$	66,165		$	71,429		$	205,519

Operting margins:
Retail operations		9.1	%		12.6	%		15.0	%		18.0	%		14.2	%
Wholesale operations		9.2	%		16.4	%		20.6	%		18.0	%		16.5	%
European operations		25.2	%		16.9	%		34.9	%		19.5	%		25.1	%
Licensing operations		82.9	%		92.8	%		77.6	%		94.4	%		87.4	%
		12.9	%		12.8	%		20.1	%		18.0	%		16.4	%

Guess?, Inc. and Subsidiaries

Selected Condensed Consolidated Balance Sheet Data

(in thousands)

	April 29,		July 29,		October 28,		February 3,
	2006		2006		2006		2007

ASSETS

Cash and cash equivalents	$	155,533	$	196,027	$	163,806	$	207,617

Restricted cash		---		---		16,361		---

Receivables, net		125,976		109,068		173,750		142,659

Inventories, net		108,241		132,453		144,514		173,668

Other current assets		34,166		36,911		39,097		39,523

Property and equipment, net		150,730		157,755		160,677		162,555

Other assets		97,026		104,630		109,337		117,300

Total Assets	$	671,672	$	736,844	$	807,542	$	843,322

LIABILITIES AND STOCKHOLDERS' EQUITY

Current installments of notes payable, long-term debt and capital lease	$	44,768	$	26,262	$	52,585	$	20,804

Other current liabilities		164,536		226,805		229,159		258,725

Notes payable, long-term debt and capital lease, excluding current installments		52,152		46,946		41,122		17,336

Other long-term liabilities		88,420		88,606		87,930		103,126

Minority interest		---		367		478		4,607

Stockholders' equity		321,796		347,858		396,268		438,724

Total Liabilities and Stockholders' Equity	$	671,672	$	736,844	$	807,542	$	843,322

Guess?, Inc. and Subsidiaries

Condensed Consolidated Cash Flow Data

(in thousands)

	Three Months Ended			Six Months Ended			Nine Months Ended			Twelve Months Ended
	April 29,			July 29,			October 28,			February 3,
	2006			2006			2006			2007


Net cash (used in) provided by operating activities	$	(17,726	)	$	63,102		$	39,514		$	141,738

Net cash used in investing activities		(13,039	)		(32,813	)		(47,785	)		(75,708	)

Net cash provided (used in) financing activities		18,559			(2,087	)		4,243			(25,942	)

Effect of exchange rates on cash		545			631			640			335

Net (decrease) increase in cash and cash equivalents		(11,661	)		28,833			(3,388	)		40,423

Cash and cash equivalents at the beginning of the year		167,194			167,194			167,194			167,194

Cash and cash equivalents at the end of the period	$	155,533		$	196,027		$	163,806		$	207,617

Supplemental information:

Depreciation and amortization	$	8,372		$	17,888		$	27,991		$	39,600

Rent		20,160			41,195			63,003			85,368

Guess?, Inc. and Subsidiaries

Retail Store Data

U.S. and Canada

	Three Months Ended			Six Months Ended			Nine Months Ended			Twelve Months Ended
	April 29,			July 29,			October 28,			February 3,
	2006			2006			2006			2007


Number of stores at the beginning of the year		311			311			311			311

Store openings		9			17			27			33

Store closures		(4	)		(6	)		(6	)		(10	)

Number of stores at the end of the period		316			322			332			334

Total store square footage at the end of the period		1,553,000			1,574,000			1,607,000			1,610,000

Three Months Ended

Twelve Months Ended

April 29,

July 29,

October 28,

February 3,

2006

2007

Comparable store sales percentage increase

12.6

13.7

8.9

11.0

11.4