LOS ANGELES, Aug 06, 2003 /PRNewswire-FirstCall via Comtex/ -- Guess?, Inc. (NYSE: GES) today reported its financial results for the second quarter ended June 28, 2003 and its retail sales results for the fiscal month of July 2003.
Second Quarter Results
For the second quarter of 2003, the Company reported a net loss of $5.4 million, or a diluted loss of $0.13 per share, compared to a net loss of $6.4 million, or a diluted loss of $0.15 per share, for the second quarter of 2002.
Total net revenue for the second quarter of 2003 increased 9.4% to $131.0 million from $119.8 million in the second quarter of 2002. The Company's retail stores, including those in Canada, generated revenues of $95.7 million in the 2003 second quarter, a 19.7% increase from $79.9 million reported in the same period a year ago. Comparable store sales increased 11.7% during the second quarter of 2003 from the year-ago period. Net revenue from the Company's wholesale segment decreased 16.9% to $27.5 million in the second quarter of 2003 from $33.1 million in the year-ago period. Licensing segment net revenue increased 16.0% to $7.8 million in the 2003 second quarter from $6.8 million in the second quarter last year.
Carlos Alberini, President and Chief Operating Officer, commented, "We are pleased with the strong retail sales trends we are seeing in our stores and the positive impact we have experienced from our recent product offerings. However, overall results for the quarter also reflect increased operating losses in the wholesale business caused by reduced revenue and lower margins due to ongoing competitive pressures and sales to the off-price channel. We continue to work diligently to turn this business around and are encouraged by improved sell-throughs on the retail floor from our recent product deliveries."
Six Months Results
For the six months ended June 28, 2003, the Company reported a net loss of $11.2 million, or a diluted loss per share of $0.26, versus a net loss of $10.0 million, or a diluted loss per share of $0.23 in the comparable 2002 period.
Total net revenue increased 4.9% to $270.6 million in the 2003 six-month period from $258.0 million in the same period in 2002. The Company's retail stores, including those in Canada, generated revenue of $179.3 million for the first six months of 2003, an increase of 13.0% from $158.8 million for the same period last year. Comparable store sales increased 5.0% during the first half of 2003. Net revenue from the Company's wholesale segment in the first six months of 2003 declined by 12.0% to $72.6 million from $82.5 million in the first six months of 2002. Licensing segment net revenue was $18.7 million for the 2003 first six months, a 12.1% increase from $16.7 million for the same period in 2002.
July Retail Sales
Total retail sales for the five weeks ended August 2, 2003 were $40.5 million, an increase of 18.1% from sales of $34.3 million for the five weeks ended August 3, 2002. Comparable store sales for the period increased 11.6%.
The Company will hold a conference call at 4:30 pm (ET) on August 6, 2003 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 Page" link from the "About Guess, Inc." section of the site. The webcast will be archived on the website.
Guess?, Inc. designs, markets, distributes and licenses one of the world's leading lifestyle collections of contemporary apparel, accessories and related consumer products.
Except for historical information contained herein, certain matters discussed in this press release, including but not limited to the Company's plans to reduce operating losses in its wholesale business, 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 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, 2002 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.
For further information please 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 or Molly Morse of Kekst and Company, +1-212-521-4800, for Guess?, Inc.
Guess?, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three Months Ended
June 28, June 29,
2003 2002
$ % $ %
Net revenue
Product sales $123,164 94.0% $112,996 94.3%
Net royalties 7,878 6.0% 6,793 5.7%
131,042 100.0% 119,789 100.0%
Cost of product sales 90,055 68.7% 79,381 66.3%
Gross profit 40,987 31.3% 40,408 33.7%
Selling, general and
administrative expenses 47,207 36.0% 49,847 41.6%
Restructuring, impairment
and severance charges 846 0.6% --- 0.0%
Loss from operations (7,066) (5.3%) (9,439) (7.9%)
Other (income) expense:
Interest expense 2,558 2.0% 2,258 1.9%
Interest Income (58) (0.0%) (83) (0.1%)
Other, net (11) (0.0%) (647) (0.5%)
Loss before income tax
benefit (9,555) (7.3%) (10,967) (9.2%)
Income tax benefit (4,110) (3.1%) (4,535) (3.8%)
Net loss $(5,445) (4.2%) $(6,432) (5.4%)
Net loss per share:
Basic and Diluted $(0.13) $(0.15)
Weighted number of shares
outstanding:
Basic and Diluted 43,155 43,629
Six Months Ended
June 28, June 29,
2003 2002
$ % $ %
Net revenue
Product sales $251,886 93.1% $241,257 93.5%
Net royalties 18,740 6.9% 16,711 6.5%
270,626 100.0% 257,968 100.0%
Cost of product sales 188,290 69.6% 172,444 66.8%
Gross profit 82,336 30.4% 85,524 33.2%
Selling, general and
administrative expenses 96,631 35.7% 98,474 38.2%
Restructuring, impairment
and severance charges 846 0.3% 655 0.3%
Loss from operations (15,141) (5.6%) (13,605) (5.3%)
Other (income) expense:
Interest expense 4,646 1.7% 4,592 1.8%
Interest Income (83) (0.0%) (153) (0.1%)
Other, net (26) (0.0%) (676) (0.3%)
Loss before income tax
benefit (19,678) (7.3%) (17,368) (6.7%)
Income tax benefit (8,460) (3.2%) (7,335) (2.8%)
Net loss $(11,218) (4.1%) $(10,033) (3.9%)
Net loss per share:
Basic and Diluted $(0.26) $(0.23)
Weighted number of shares
outstanding:
Basic and Diluted 43,148 43,578
Guess?, Inc. and Subsidiaries
Consolidated Segment Data
(in thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 28, June 29, June 28, June 29,
2003 2002 2003 2002
Net revenue:
Retail operations $95,657 $79,892 $179,319 $158,758
Wholesale operations 27,507 33,104 72,567 82,499
Licensing operations 7,878 6,793 18,740 16,711
$131,042 $119,789 $270,626 $257,968
Earnings (loss) from operations:
Retail operations $4,430 $(2,391) $(2,064) $(6,907)
Wholesale operations (8,388) (688) (8,128) 2,737
Licensing operations 5,791 4,144 14,711 11,735
Corporate overhead (8,899) (10,504) (19,660) (21,170)
$(7,066) $(9,439) $(15,141) $(13,605)
Guess?, Inc. and Subsidiaries
Selected Condensed Consolidated Balance Sheet Data
(in thousands)
(Unaudited)
June 28, Dec 31, June 29,
2003 2002 2002
ASSETS
Cash and cash equivalents $7,102 $31,753 $27,133
Restricted cash 4,923 --- ---
Receivables, net 36,116 35,437 33,930
Inventories, net 96,269 95,683 87,222
Other current assets 30,005 26,114 28,170
Property and equipment, net 120,911 128,097 137,378
Other assets 36,186 32,448 28,847
Total Assets $331,512 $349,532 $342,680
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $91,038 $167,561 $82,625
Notes payable and long-term debt,
excluding current installments 67,631 1,480 79,933
Other liabilities 14,584 14,211 10,424
Stockholders' equity 158,259 166,280 169,698
Total Liabilities and
Stockholders' Equity $331,512 $349,532 $342,680
Guess?, Inc. and Subsidiaries
Condensed Consolidated Cash Flow Data
(in thousands)
(Unaudited)
Six Months Ended
June 28, June 29,
2003 2002
Net cash (used in) provided by
operating activities $(18,241) $5,589
Net cash used in investing activities (7,179) (10,683)
Net cash provided by financing
activities 372 280
Effect of exchange rates on cash 397 77
Net decrease in cash and cash
equivalents (24,651) (4,737)
Cash and cash equivalents at the
beginning of the year 31,753 31,870
Cash and cash equivalents at the end
of the period $7,102 $27,133
Supplemental information:
Depreciation and amortization $17,508 $20,230
Rent 28,802 25,591
Guess?, Inc. and Subsidiaries
Retail Store Data
Six Months Ended
June 28, June 29,
2003 2002
Number of stores at the beginning of
the year 249 227
Store openings 8 5
Store closures (3) ---
Number of stores at the end of the
period 254 232
Total store square footage at the end
of the period 1,302,000 1,189,000
SOURCE Guess?, Inc.
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 or Molly Morse of Kekst and Company, +1-212-521-4800, for Guess?, Inc.
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