LOS ANGELES, July 29 /PRNewswire-FirstCall/ -- Guess?, Inc. (NYSE: GES) today reported financial results for the second quarter ended June 26, 2004.
Second Quarter Results
For the second quarter ended June 26, 2004, the Company reported net earnings of $2.1 million, or diluted earnings of $0.05 per share, compared to a net loss of $5.4 million, or a diluted loss of $0.13 per share, for the second quarter ended June 28, 2003. The second quarter 2003 included a pre-tax restructuring, impairment and severance charge of $0.8 million, or $0.5 million net of tax.
Paul Marciano, Co-Chairman and Co-CEO commented, "Guess?'s second quarter performance showed significant improvement over the prior year period. Strong same store sales growth in our retail stores, higher income from our licensing business and improved results in wholesale contributed to the gains for the period. We achieved a $12.3 million improvement in operating income as a result of a significant margin increase and considerable expense leverage on higher sales volume. We are focused on building on the momentum in our core businesses and best positioning Guess? for the long term."
Total net revenue for the second quarter of 2004 increased 17.6% to $154.1 million from $131.0 million in the second quarter of 2003. The Company's retail stores, including those in Canada, generated revenues of $115.2 million in the 2004 second quarter, a 20.5% increase from $95.7 million, as reported in the prior year period. Comparable store sales increased 15.1% during the second quarter of 2004 from the prior year period. Net revenue from the Company's wholesale segment increased 6.3% to $29.3 million in the second quarter of 2004 from $27.5 million in the same year-ago period. Licensing segment net revenue increased 22.0% to $9.6 million in the second quarter of 2004 from $7.8 million in the prior year period. The Company operated 264 retail stores at second quarter-end 2004 versus 254 stores a year earlier.
Six Month Results
For the six months ended June 26, 2004, the Company reported net earnings of $2.9 million, or diluted earnings of $0.06 per share, versus a net loss of $11.2 million, or a diluted loss of $0.26 per share, in the comparable 2003 period. The 2003 six-month period included a pre-tax restructuring, impairment and severance charge of $0.8 million, or $0.5 million net of tax.
Total net revenue increased 13.6% to $307.4 million in the 2004 six-month period from $270.6 million in the prior year period. The Company's retail stores, including those in Canada, generated revenue of $214.8 million for the first six months of 2004, an increase of 19.8% from $179.3 million for the prior year period. Comparable store sales increased 14.0% during the first half of 2004. Net revenue from the Company's wholesale segment in the first half of 2004 decreased 0.6% to $72.1 million from $72.6 million in the first six months of 2003. Licensing segment net revenue was $20.5 million in the first six months of 2004, a 9.6% increase from $18.7 million for the same prior year period.
July 2004 Comparable Store Sales
The Company's July 2004 fiscal month began on June 27, 2004 and will end on July 31, 2004. Based on current sales trends, the Company expects July comparable store sales to increase in the mid-teens on a percentage basis.
The Company will hold a conference call at 4:30 pm (ET) on July 29, 2004 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.
Guess?, Inc. designs, markets, distributes and licenses a lifestyle collection of contemporary apparel, accessories and related consumer products. At June 26, 2004, the Company operated 264 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 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, 2003 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 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 26, June 28,
2004 2003
$ % $ %
Net revenue
Product sales $144,489 93.8% $123,164 94.0%
Net royalties 9,608 6.2% 7,878 6.0%
154,097 100.0% 131,042 100.0%
Cost of product sales 96,307 62.5% 90,055 68.7%
Gross profit 57,790 37.5% 40,987 31.3%
Selling, general and
administrative expenses 52,577 34.1% 47,207 36.0%
Restructuring, impairment
and severance charges --- --- 846 0.7%
Earnings (loss)
from operations 5,213 3.4% (7,066) (5.4%)
Other (income) expense:
Interest expense 1,576 1.0% 2,558 2.0%
Interest Income (103) 0.0% (58) (0.0%)
Other, net --- --- (11) (0.0%)
Earnings (loss) before
income taxes (benefit) 3,740 2.4% (9,555) (7.3%)
Income taxes (benefit) 1,609 1.0% (4,110) (3.1%)
Net earnings (loss) $2,131 1.4% $(5,445) (4.2%)
Net earnings (loss) per share:
Basic $0.05 $(0.13)
Diluted $0.05 $(0.13)
Weighted number of shares outstanding:
Basic 43,997 43,155
Diluted 44,553 43,155
Guess?, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Six Months Ended
June 26, June 28,
2004 2003
$ % $ %
Net revenue
Product sales $286,894 93.3% $251,886 93.1%
Net royalties 20,548 6.7% 18,740 6.9%
307,442 100.0% 270,626 100.0%
Cost of product sales 197,122 64.1% 188,290 69.6%
Gross profit 110,320 35.9% 82,336 30.4%
Selling, general and
administrative expenses 102,498 33.3% 96,631 35.7%
Restructuring, impairment
and severance charges --- --- 846 0.3%
Earnings (loss)
from operations 7,822 2.6% (15,141) (5.6%)
Other (income) expense:
Interest expense 2,961 1.0% 4,646 1.7%
Interest Income (205) 0.0% (83) (0.0%)
Other, net --- --- (26) (0.0%)
Earnings (loss) before
income taxes (benefit) 5,066 1.6% (19,678) (7.3%)
Income taxes (benefit) 2,179 0.7% (8,460) (3.2%)
Net earnings (loss) $2,887 0.9% $(11,218) (4.1%)
Net earnings (loss) per share:
Basic $0.07 $(0.26)
Diluted $0.06 $(0.26)
Weighted number of shares outstanding:
Basic 43,881 43,148
Diluted 44,456 43,148
Guess?, Inc. and Subsidiaries
Consolidated Segment Data
(in thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 26, June 28, June 26, June 28,
2004 2003 2004 2003
Net revenue:
Retail operations $115,248 $95,657 $214,772 $179,319
Wholesale operations 29,241 27,507 72,122 72,567
Licensing operations 9,608 7,878 20,548 18,740
$154,097 $131,042 $307,442 $270,626
Earnings (loss) from operations:
Retail operations $12,546 $4,430 $10,868 $(2,064)
Wholesale operations (5,260) (8,388) (1,163) (8,128)
Licensing operations 7,065 5,791 16,048 14,711
Corporate overhead (9,138) (8,899) (17,931) (19,660)
$5,213 $(7,066) $7,822 $(15,141)
Guess?, Inc. and Subsidiaries
Selected Condensed Consolidated Balance Sheet Data
(in thousands)
(Unaudited)
June 26, Dec 31, June 28,
2004 2003 2003
ASSETS
Cash and cash equivalents $50,377 $67,163 $7,102
Restricted cash 4,097 4,509 4,923
Receivables, net 38,084 32,602 36,116
Inventories, net 96,810 83,530 96,269
Other current assets 26,684 22,840 30,005
Property and equipment, net 106,524 114,403 120,911
Other assets 35,588 37,718 36,186
Total Assets $358,164 $362,765 $331,512
LIABILITIES AND STOCKHOLDERS' EQUITY
Current installments of notes
payable and long-term debt $12,948 $13,931 $13,933
Other current liabilities 92,510 96,944 77,105
Notes payable and long-term debt,
excluding current installments 47,773 54,161 67,631
Other liabilities 16,353 14,947 14,584
Stockholders' equity 188,580 182,782 158,259
Total Liabilities and
Stockholders' Equity $358,164 $362,765 $331,512
Guess?, Inc. and Subsidiaries
Condensed Consolidated Cash Flow Data
(in thousands)
(Unaudited)
Six Months Ended
June 26 June 28,
2004 2003
Net cash used in operating activities $(4,682) $(18,241)
Net cash used in investing activities (6,736) (7,179)
Net cash (used in) provided by
financing activities (5,282) 372
Effect of exchange rates on cash (86) 397
Net decrease in cash and cash equivalents (16,786) (24,651)
Cash and cash equivalents at the
beginning of the year 67,163 31,753
Cash and cash equivalents at the
end of the period $50,377 $7,102
Supplemental information:
Depreciation and amortization $17,498 $17,508
Rent 30,462 28,802
Guess?, Inc. and Subsidiaries
Retail Store Data
(Unaudited)
Six Months Ended
June 26, June 28,
2004 2003
Number of stores at the beginning of the year 265 249
Store openings 7 8
Store closures (8) (3)
Number of stores at the end of the period 264 254
Total store square footage at the
end of the period 1,370,000 1,302,000
SOURCE Guess?, Inc.
-0- 07/29/2004
/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 CCA
ES
-- LATH045 --
7382 07/29/2004 16:02 EDT http://www.prnewswire.com