First Quarter EPS of $0.18 Versus $0.02 in 2004
LOS ANGELES, May 4 /PRNewswire-FirstCall/ -- Guess?, Inc. (NYSE: GES) today reported financial results for the first quarter ended April 2, 2005.
First Quarter Results
For the first quarter of 2005, the Company reported net earnings of $8.2 million, or diluted earnings of $0.18 per share, compared to net earnings of $0.8 million, or diluted earnings of $0.02 per share, for the first quarter ended March 27, 2004. The first quarter ended April 2, 2005 had 92 days compared to 87 days in the first quarter ended March 27, 2004.
Carlos Alberini, President and COO, commented, "Our first quarter financial results were stronger than plan and significantly ahead of last year's performance. These improved results reflected primarily a higher than anticipated contribution from our European business, although a portion of this contribution had been planned for the second quarter of 2005. Europe as a region benefited from very robust sales of accessories and stronger than expected performance from the European jeanswear business we just acquired. Our domestic wholesale business and licensing operations also had improved results in the quarter. We are very pleased with the Company's overall results in the period. Moreover, we see significant opportunities in all of our businesses and remain confident in our outlook for 2005."
Total net revenue for the first quarter of 2005 increased 40.6% to $215.6 million from $153.3 million in the first quarter of 2004, including $26.3 million in revenue from the European acquisition. The Company's retail operations in the U.S. and Canada generated revenues of $116.5 million in the 2005 first quarter, a 17.1% increase from $99.5 million reported in the same period a year ago. Comparable store sales for the U.S. and Canada increased 4.5% during the first quarter of 2005 from the year-ago period. Net revenue from the Company's wholesale segment, which excludes Europe, increased 10.6% to $31.1 million in the first quarter of 2005, compared to $28.1 million in the year-ago period. Net revenue from the Company's European operations increased by $41.8 million to $56.6 million in the first quarter of 2005, compared to $14.8 million in the prior year period. Licensing segment net revenue increased 4.3% to $11.4 million in the 2005 first quarter from $10.9 million in the first quarter last year.
The Company also noted that its earnings as stated in U.S. dollars benefited from the strong Euro currency which has appreciated by approximately 6.5% against the U.S. dollar in the last 12 months.
April 2005 Retail Sales
The Company also reported today retail sales for its stores in the U.S. and Canada for fiscal April 2005. Total April retail sales for the four weeks ended April 30, 2005, were $39.4 million, an increase of 8.4% from sales of $36.3 million for the four weeks ended May 1, 2004. Comparable store sales for the April period decreased 1.2% compared to the year-ago period.
Change in Segment Reporting
In the first quarter of 2005, the Company revised its segment reporting to include its European operations as a separate segment. The Company believes this segment reporting better reflects how its four business segments -- retail, wholesale, European and licensing -- are managed and each segment's performance is evaluated. The European segment includes both wholesale and retail operations in Europe. The retail segment includes the Company's retail operations in North America. The wholesale segment includes the wholesale operations in North America and internationally, excluding Europe. The licensing segment includes the worldwide licensing operations of the Company. All amounts for 2004 have been revised to conform to the 2005 presentation and are included with this release.
The Company will hold a conference call at 4:30 pm (ET) on May 4, 2005 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's Info" link from the "Guess, Inc." section of the site. 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 April 2, 2005 the Company owned and operated 289 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.guess.com.
Except for historical information contained herein, certain matters discussed in this press release 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 and other future events to differ materially from what is currently anticipated. Factors which may cause actual results in future periods to differ from current expectations include, among other things, the continued availability of sufficient working capital, the successful integration of acquisitions and new stores into existing operations, the continued desirability and customer acceptance of existing and future product lines (including licensed product lines), possible cancellations of wholesale orders, the success of competitive products, and the availability of adequate sources of capital. In addition to these factors, the economic and other factors identified in the Company's most recent annual report on Form 10-K for the fiscal year ended December 31, 2004 including but not limited to the risk factors discussed therein, could affect the forward-looking statements contained herein and in the Company's other public documents.
Contact: Carlos Alberini
President & Chief Operating Officer
Guess?, Inc.
(213) 765-3582
Frederick G. Silny
SVP & Chief Financial Officer
(213) 765-3289
Wendi Kopsick
Kekst and Company
(212) 521-4800
Guess?, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three Months Ended
April 2, March 27,
2005 2004
$ % $ %
Net revenue
Product sales $204,194 94.7% $142,405 92.9%
Net royalties 11,414 5.3% 10,940 7.1%
215,608 100.0% 153,345 100.0%
Cost of product sales 133,385 61.9% 100,815 65.7%
Gross profit 82,223 38.1% 52,530 34.3%
Selling, general and
administrative expenses 67,069 31.1% 49,921 32.6%
Earnings from operations 15,154 7.0% 2,609 1.7%
Other (income) expense:
Interest expense 1,754 0.8% 1,385 0.9%
Interest income (435) (0.2%) (102) (0.1%)
Earnings before income taxes 13,835 6.4% 1,326 0.9%
Income taxes 5,672 2.6% 570 0.4%
Net earnings $8,163 3.8% $756 0.5%
Net earnings per share:
Basic $0.18 $0.02
Diluted $0.18 $0.02
Weighted number of
shares outstanding:
Basic 44,200 43,760
Diluted 44,644 44,361
Guess?, Inc. and Subsidiaries
Consolidated Segment Data
(in thousands)
(Unaudited)
Three Months Ended
April 2, March 27,
2005 2004
Net revenue:
Retail operations $116,495 $99,524
Wholesale operations 31,059 28,089
European operations 56,640 14,792
Licensing operations 11,414 10,940
$215,608 $153,345
Earnings (loss) from operations:
Retail operations $(3,408) $(1,678)
Wholesale operations 2,127 (1,194)
European operations 15,853 5,291
Licensing operations 9,144 8,983
Corporate overhead (8,562) (8,793)
$15,154 $2,609
Guess?, Inc. and Subsidiaries
Selected Condensed Consolidated Balance Sheet Data
(in thousands)
(Unaudited)
April 2, December 31, March 27,
2005 2004 2004
ASSETS
Cash and cash equivalents $89,248 $106,003 $45,724
Restricted cash 3,403 3,660 4,260
Receivables, net 123,007 53,915 51,118
Inventories, net 95,595 82,329 81,044
Other current assets 26,375 25,116 25,433
Property and equipment, net 117,659 113,944 109,988
Other assets 57,659 39,337 37,261
Total Assets $512,946 $424,304 $354,828
LIABILITIES AND STOCKHOLDERS' EQUITY
Current installments of notes
payable and long-term debt $53,905 $13,430 $15,124
Other current liabilities 140,058 119,369 89,328
Notes payable and long-term debt,
excluding current installments 53,865 41,396 50,349
Other liabilities 37,467 29,532 15,820
Stockholders' equity 227,651 220,577 184,207
Total Liabilities and
Stockholders' Equity $512,946 $424,304 $354,828
Guess?, Inc. and Subsidiaries
Condensed Consolidated Cash Flow Data
(in thousands)
(Unaudited)
Three Months Ended
April 2, March 27,
2005 2004
Net cash used in operating activities $(2,737) $(15,644)
Net cash used in investing activities (27,145) (4,471)
Net cash provided by (used in)
financing activities 13,309 (1,278)
Effect of exchange rates on cash (182) (46)
Net decrease in cash and cash
equivalents (16,755) (21,439)
Cash and cash equivalents at the
beginning of the year 106,003 67,163
Cash and cash equivalents at the end
of the period $89,248 $45,724
Supplemental information:
Depreciation and amortization $8,427 $8,708
Rent 16,767 15,161
Guess?, Inc. and Subsidiaries
Retail Store Data
U.S. and Canada
(Unaudited)
Three Months Ended
April 2, March 27,
2005 2004
Number of stores at the
beginning of the year 287 265
Store openings 7 1
Store closures (5) (7)
Number of stores at the end
of the period 289 259
Total store square footage
at the end of the period 1,465,000 1,342,000
Guess?, Inc. and Subsidiaries
Consolidated Segment Data - Revised
(in thousands)
(Unaudited)
First Second Third Fourth
Quarter Quarter Quarter Quarter Year
Ended Ended Ended Ended Ended
Mar 27, Jun 26, Sep 25, Dec 31, Dec 31,
2004 2004 2004 2004 2004
Net revenue:
Retail operations $99,524 $115,248 $132,133 $171,950 $518,855
Wholesale
operations 28,089 25,214 34,112 32,977 120,392
European
operations 14,792 4,027 17,308 6,646 42,773
Licensing
operations 10,940 9,608 14,284 12,410 47,242
$153,345 $154,097 $197,837 $223,983 $729,262
Earnings (loss)
from operations:
Retail
operations $(1,678) $12,546 $12,743 $24,177 $47,788
Wholesale
operations (1,194) (4,752) (741) 1,122 (5,565)
European
operations 5,291 (508) 4,580 (1,615) 7,748
Licensing
operations 8,983 7,065 12,130 9,544 37,722
Corporate
overhead (8,793) (9,138) (7,198) (7,082) (32,211)
$2,609 $5,213 $21,514 $26,146 $55,482
SOURCE Guess?, Inc.
-0- 05/04/2005
/CONTACT: Carlos Alberini, President & Chief Operating Officer,
+1-213-765-3582, or Frederick G. Silny, SVP & Chief Financial Officer,
+1-213-765-3289, both of Guess?, Inc.; or Wendi Kopsick of Kekst and Company,
+1-212-521-4800, for Guess?, Inc./
/Web site: http://www.guess.com /
(GES)
CO: Guess?, Inc.
ST: California
IN: REA TEX FAS
SU: ERN SLS CCA
AJ-CM
-- LAW098 --
4073 05/04/2005 16:00 EDT http://www.prnewswire.com