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): September 4,
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 September 4, 2007. The press release announced
its financial results for the quarter ended August 4, 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 September 4, 2007 (financial results
for the
quarter ended August 4, 2007)
|
2
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.
| Dated: September 4, 2007 | GUESS?, INC. | |
| |
|
|
| By: | /s/ Carlos Alberini | |
|
Carlos Alberini |
||
| President and Chief Operating Officer | ||
3
EXHIBIT
INDEX
|
Exhibit
No.
|
Description
|
|
|
99.1
|
Press
Release of Guess?, Inc. dated September 4, 2007 (financial results
for the
quarter ended August 4, 2007)
|
4
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 SECOND QUARTER 2008 REVENUES, AN INCREASE OF 48%, AND
RECORD
SECOND QUARTER EPS OF $0.40, AN INCREASE OF 82%.
COMPANY
RAISES FISCAL YEAR EPS GUIDANCE TO A RANGE OF $1.79 TO $1.84, FROM A RANGE
OF
$1.75 TO $1.80.
COMPANY
INCREASES QUARTERLY CASH DIVIDEND BY 33.3% TO $0.08 PER
SHARE.
Second
Quarter Highlights
-
Revenues increased 48% to a
record
of
$388.3
million
-
North American comp sales up 16.2%
-
Operating margin improved 250 basis points to 15.3%
-
Net earnings increased 82% to $37.5 million
LOS
ANGELES, September 4, 2007
-
Guess?, Inc. (NYSE: GES) today reported financial results for the second quarter
of its 2008 fiscal year, which ended August 4, 2007.
Second
Quarter 2008 Results
Paul
Marciano, Chief Executive Officer, commented, “We are very pleased with our
record financial results this quarter, which reflect the continued strength
of
the Guess brand, the success of our ongoing investments in long-term
initiatives, such as Europe, Asia, and our accessories lines, and the
consistency with which we are growing our business in North America and abroad.
We increased our revenues by 48%, as all of our businesses delivered double
digit revenue increases.”
Mr.
Marciano continued, “Strong performance across all of our product lines in our
retail business in North America led to a 16.2% same store sales increase
for
the quarter. This was our 18th
consecutive quarter of same store sales growth. Our European segment was
especially strong, and contributed nearly half of the Company’s revenue growth
with a 121% increase in revenues. Strength in our Asian business, driven
mainly by our South Korean operation, contributed to a 75% revenue increase
in
the wholesale segment. Our licensing business also continued to perform well
above our expectations - posting revenue growth of 51% in the
quarter.”
Mr.
Marciano concluded, “On a consolidated basis, we increased net earnings by 82%,
with each of our business segments contributing to this growth. Our operating
margin also improved to 15.3% from 12.8% last year, even with the investments
we
made in our long term initiatives during the quarter. This marks another
quarter
of record earnings for our Company, and the 16th
consecutive quarter of earnings growth.”
Total
net
revenue for the second quarter of fiscal 2008 increased 48.2% to $388.3 million
from $261.9 million in the prior-year period. The Company’s retail stores in the
U.S. and Canada generated revenue of $201.6 million in the second quarter of
fiscal 2008, a 21.4% increase from $166.1 million in the same period a year
ago.
Comparable store sales increased 16.2% for the quarter ended August 4, 2007,
compared to the thirteen weeks ended August 5, 2006. The Company operated 347
retail stores in the U.S. and Canada at the end of the second quarter of fiscal
2008 versus 322 stores a year earlier.
Net
revenue from the Company’s wholesale segment, which includes the Company’s Asian
operations, increased 74.5% to $57.3 million in the second quarter of fiscal
2008, from $32.8 million in the prior-year period.
Net
revenue from the Company’s European segment increased 121.2% to $107.9 million
in the second quarter of fiscal 2008, compared to $48.8 million in the
prior-year period.
Licensing
segment net revenue increased 51.1% to $21.5 million in the second quarter
of
fiscal 2008, from $14.3 million in the prior-year period.
2
Operating
earnings for the second quarter of fiscal 2008 increased 76.4% to $59.4 million
from $33.6 million in the prior-year period. Operating margin in the second
quarter improved 250 basis points to 15.3%, compared to the prior year’s
quarter. This margin expansion was driven by improved leverage over occupancy
costs and the positive impact of higher margin businesses in the
period.
Outlook
The
Company’s expectations for the fiscal year ending February 2, 2008, are now as
follows:
| - |
Consolidated
net revenues are expected to range from $1.56 billion to $1.60
billion.
|
| - |
Operating
margin is expected to be about
17.5%.
|
| - |
Diluted
earnings per share are expected to be in the range of $1.79 to
$1.84.
|
The
fiscal year ending February 2, 2008 will include 52 weeks and a four-week
January period, compared to the recast year ended February 3, 2007, which
included 53 weeks and a five-week January period.
Dividend
The
Company also announced today that its Board of Directors has increased its
quarterly cash dividend by 33.3% to $0.08 per share on the Company’s common
stock. The dividend will be payable on October 5, 2007 to shareholders of record
at the close of business on September 19, 2007.
The
Company will hold a conference call at 4:30 pm (ET) on September 4, 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 August
4,
2007 the Company operated 347 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.
3
|
Condensed
Consolidated Statements of Operations
|
|||||||||
|
(dollars
in thousands, except per share
data)
|
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||||||||||||||
|
|
August
4,
|
July
29,
|
August
4,
|
July
29,
|
|||||||||||||||||||||
|
|
2007
|
2006
|
2007
|
2006
|
|||||||||||||||||||||
|
|
$
|
%
|
$
|
%
|
$
|
%
|
$
|
%
|
|||||||||||||||||
|
Net
revenue
|
|||||||||||||||||||||||||
|
Product
sales
|
$
|
366,739
|
94.5
|
%
|
$
|
247,685
|
94.6
|
%
|
$
|
724,382
|
94.5
|
%
|
$
|
499,022
|
94.6
|
%
|
|||||||||
|
Net
royalties
|
21,548
|
5.5
|
%
|
14,264
|
5.4
|
%
|
41,854
|
5.5
|
%
|
28,610
|
5.4
|
%
|
|||||||||||||
|
388,287
|
100.0
|
%
|
261,949
|
100.0
|
%
|
766,236
|
100.0
|
%
|
527,632
|
100.0
|
%
|
||||||||||||||
|
Cost
of product sales
|
214,935
|
55.4
|
%
|
151,618
|
57.9
|
%
|
425,471
|
55.5
|
%
|
306,691
|
58.1
|
%
|
|||||||||||||
|
Gross
profit
|
173,352
|
44.6
|
%
|
110,331
|
42.1
|
%
|
340,765
|
44.5
|
%
|
220,941
|
41.9
|
%
|
|||||||||||||
|
Selling,
general and administrative expenses
|
113,991
|
29.3
|
%
|
76,683
|
29.3
|
%
|
223,470
|
29.2
|
%
|
153,016
|
29.0
|
%
|
|||||||||||||
|
Earnings
from operations
|
59,361
|
15.3
|
%
|
33,648
|
12.8
|
%
|
117,295
|
15.3
|
%
|
67,925
|
12.9
|
%
|
|||||||||||||
|
Other
(income) expense:
|
|||||||||||||||||||||||||
|
Interest
expense
|
387
|
0.1
|
%
|
1,794
|
0.7
|
%
|
1,311
|
0.2
|
%
|
3,259
|
0.6
|
%
|
|||||||||||||
|
Interest
income
|
(2,036
|
)
|
(0.5
|
%)
|
(1,494
|
)
|
(0.6
|
%)
|
(3,748
|
)
|
(0.5
|
%)
|
(2,721
|
)
|
(0.5
|
%)
|
|||||||||
|
Other,
net
|
(530
|
)
|
(0.1
|
%)
|
(827
|
)
|
(0.3
|
%)
|
361
|
---
|
(1,124
|
)
|
(0.2
|
%)
|
|||||||||||
|
Earnings
before income taxes and minority interests
|
61,540
|
15.8
|
%
|
34,175
|
13.0
|
%
|
119,371
|
15.6
|
%
|
68,511
|
13.0
|
%
|
|||||||||||||
|
Income
taxes
|
24,036
|
6.1
|
%
|
13,652
|
5.1
|
%
|
46,399
|
6.1
|
%
|
27,317
|
5.2
|
%
|
|||||||||||||
|
Minority
interest
|
22
|
---
|
(123
|
)
|
---
|
(37
|
)
|
---
|
(123
|
)
|
---
|
||||||||||||||
|
Net
earnings
|
$
|
37,482
|
9.7
|
%
|
$
|
20,646
|
7.9
|
%
|
$
|
73,009
|
9.5
|
%
|
$
|
41,317
|
7.8
|
%
|
|||||||||
|
Net
earnings per share:
|
|||||||||||||||||||||||||
|
Basic
|
$
|
0.41
|
|
|
$
|
0.23
|
|
$ |
0.79
|
$ |
0.46
|
||||||||||||||
|
Diluted
|
$
|
0.40
|
|
|
$
|
0.22
|
|
|
$ |
0.78
|
$ |
0.45
|
|||||||||||||
|
Weighted
number of shares outstanding:
|
|||||||||||||||||||||||||
|
Basic
|
92,180
|
|
90,594
|
|
92,033
|
90,370
|
|||||||||||||||||||
|
|
|||||||||||||||||||||||||
|
Diluted
|
93,507
|
|
91,936
|
|
93,373
|
91,782
|
|||||||||||||||||||
F-1
|
Consolidated
Segment Data
|
|||||||
|
(in
thousands)
|
|
|
|
Three
Months Ended
|
|
Six
Months Ended
|
|
||||||||||||||
|
|
|
August
4,
|
|
July
29,
|
|
%
|
|
August
4,
|
|
July
29,
|
|
%
|
|
||||||
|
|
|
2007
|
|
2006
|
|
chg
|
|
2007
|
|
2006
|
|
chg
|
|||||||
|
Net
revenue:
|
|||||||||||||||||||
|
Retail
operations
|
$
|
201,573
|
$
|
166,095
|
21
|
%
|
$
|
381,102
|
$
|
316,956
|
20
|
%
|
|||||||
|
Wholesale
operations
|
57,278
|
32,824
|
75
|
%
|
116,473
|
66,184
|
76
|
%
|
|||||||||||
|
European
operations
|
107,888
|
48,766
|
121
|
%
|
226,807
|
115,882
|
96
|
%
|
|||||||||||
|
Licensing
operations
|
21,548
|
14,264
|
51
|
%
|
41,854
|
28,610
|
46
|
%
|
|||||||||||
|
$
|
388,287
|
$
|
261,949
|
48
|
%
|
$
|
766,236
|
$
|
527,632
|
45
|
%
|
||||||||
|
Earnings
(loss) from operations:
|
|||||||||||||||||||
|
Retail
operations
|
$
|
27,761
|
$
|
20,939
|
33
|
%
|
$
|
47,653
|
$
|
34,628
|
38
|
%
|
|||||||
|
Wholesale
operations
|
10,193
|
5,394
|
89
|
%
|
20,894
|
8,466
|
147
|
%
|
|||||||||||
|
European
operations
|
19,366
|
8,219
|
136
|
%
|
47,083
|
25,163
|
87
|
%
|
|||||||||||
|
Licensing
operations
|
19,107
|
13,232
|
44
|
%
|
36,464
|
25,120
|
45
|
%
|
|||||||||||
|
Corporate
overhead
|
(17,066
|
)
|
(14,136
|
)
|
21
|
%
|
(34,799
|
)
|
(25,452
|
)
|
37
|
%
|
|||||||
|
$
|
59,361
|
$
|
33,648
|
76
|
%
|
$
|
117,295
|
$
|
67,925
|
73
|
%
|
||||||||
|
Operating
margins:
|
|||||||||||||||||||
|
Retail
operations
|
13.8
|
%
|
12.6
|
%
|
12.5
|
%
|
10.9
|
%
|
|||||||||||
|
Wholesale
operations
|
17.8
|
%
|
16.4
|
%
|
17.9
|
%
|
12.8
|
%
|
|||||||||||
|
European
operations
|
18.0
|
%
|
16.9
|
%
|
20.8
|
%
|
21.7
|
%
|
|||||||||||
|
Licensing
operations
|
88.7
|
%
|
92.8
|
%
|
87.1
|
%
|
87.8
|
%
|
|||||||||||
|
Total
Company
|
15.3
|
%
|
12.8
|
%
|
15.3
|
%
|
12.9
|
%
|
|||||||||||
F-2
|
Selected
Condensed Consolidated Balance Sheet Data
|
|||
|
(in
thousands)
|
|
August
4,
|
February
3,
|
July
29,
|
||||||||
|
|
2007
|
2007
|
2006
|
|||||||
|
ASSETS
|
||||||||||
|
|
||||||||||
|
Cash
and cash equivalents
|
$
|
200,456
|
$
|
207,617
|
$
|
196,027
|
||||
|
Receivables,
net
|
186,905
|
142,659
|
109,068
|
|||||||
|
Inventories,
net
|
226,377
|
173,668
|
132,453
|
|||||||
|
Other
current assets
|
45,993
|
39,523
|
36,911
|
|||||||
|
Property
and equipment, net
|
191,040
|
162,555
|
157,755
|
|||||||
|
Other
assets
|
138,393
|
117,300
|
104,630
|
|||||||
|
Total
Assets
|
$
|
989,164
|
$
|
843,322
|
$
|
736,844
|
||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||||
|
Current
portion of short-term borrowings and capital lease
obligations
|
$
|
3,550
|
$
|
20,804
|
$
|
26,262
|
||||
|
Other
current liabilities
|
325,264
|
258,725
|
226,805
|
|||||||
|
Notes
payable, long-term debt and capital lease obligations, excluding
current
installments
|
17,669
|
17,336
|
46,946
|
|||||||
|
Other
long-term liabilities
|
104,936
|
103,126
|
88,606
|
|||||||
|
Minority
interest
|
4,570
|
4,607
|
367
|
|||||||
|
Stockholders'
equity
|
533,175
|
438,724
|
347,858
|
|||||||
|
Total
Liabilities and Stockholders' Equity
|
$
|
989,164
|
$
|
843,322
|
$
|
736,844
|
||||
F-3
|
Condensed
Consolidated Cash Flow Data
|
|||||||
|
(in
thousands)
|
|||||||
|
|
Six
Months Ended
|
||||||
|
|
August
4,
|
July
29,
|
|||||
|
|
2007
|
2006
|
|||||
|
Net
cash provided by operating activities
|
$
|
61,826
|
$
|
63,102
|
|||
|
Net
cash used in investing activities
|
(57,724
|
)
|
(32,813
|
)
|
|||
|
Net
cash used in financing activities
|
(13,634
|
)
|
(2,087
|
)
|
|||
|
Effect
of exchange rates on cash
|
2,371
|
631
|
|||||
|
Net
(decrease) increase in cash and cash equivalents
|
(7,161
|
)
|
28,833
|
||||
|
Cash
and cash equivalents at the beginning of the year
|
207,617
|
167,194
|
|||||
|
Cash
and cash equivalents at the end of the period
|
$
|
200,456
|
$
|
196,027
|
|||
|
Supplemental
information:
|
|||||||
|
Depreciation
and amortization
|
$
|
24,558
|
$
|
17,888
|
|||
|
Rent
|
55,296
|
41,195
|
|||||
F-4
|
Retail
Store Data
|
|||||||
|
U.S.
and Canada
|
|||||||
|
Six
Months Ended
|
|||||||
|
|
August
4,
|
July
29,
|
|||||
|
|
2007
|
2006
|
|||||
|
Number
of stores at the beginning of the year
|
334
|
311
|
|||||
|
Store
openings
|
20
|
17
|
|||||
|
|
|||||||
|
Store
closures
|
(7
|
)
|
(6
|
)
|
|||
|
Number
of stores at the end of the period
|
347
|
322
|
|||||
|
Total
store square footage at the end of the period
|
1,646,000
|
1,574,000
|
|||||
F-5