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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):
October 28, 2004 (October 28, 2004)
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 240.13a-4(c))
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Item 7.01. Regulation FD Disclosure.
Guess?, Inc. issued a press release on October 28, 2004. The press release
announced its financial results for the quarter ended September 25, 2004. The
press release is attached as Exhibit 99.1 and is hereby incorporated by
reference in its entirety.
The information in this Form 8-K is being furnished under Item 7.01 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.
2
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
99.1 Press Release of Guess?, Inc. dated October 28, 2004 (financial results
for the third fiscal quarter of 2004)
3
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, in the City of Los Angeles, State of California, on
October 28, 2004.
GUESS?, INC.
By: /s/ Maurice Marciano
Maurice Marciano
Co-Chairman of the Board,
Co-Chief Executive Officer and
Director
4
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Press Release of Guess?, Inc. dated October 28, 2004.
(financial results for the third fiscal quarter of 2004)
5
Exhibit 99.1
Guess?, Inc. Third Quarter 2004 Earnings Increase to $0.27 Per Share From
Earnings of $0.15 Per Share in Third Quarter Last Year
LOS ANGELES, Oct. 28 /PRNewswire-FirstCall/ -- Guess?, Inc. (NYSE: GES)
today reported financial results for the third quarter ended September 25,
2004.
Third Quarter Results
For the third quarter ended September 25, 2004, the Company's net earnings
increased to $11.8 million, or diluted earnings of $0.27 per share, from net
earnings of $6.7 million, or diluted earnings of $0.15 per share, for the
third quarter ended September 27, 2003.
Paul Marciano, Co-Chairman and Co-CEO commented, "Guess? achieved a strong
performance for the third quarter with net income up 76% over the prior year
period. The increase was driven by improved results across all segments of
our business -- retail, wholesale and licensing -- as we benefited from strong
same store sales growth in our retail stores, better performance in wholesale
due to increased international sales and higher income from our licensing
business. We recently announced the planned acquisition of our jeanswear
licensee in Europe, which will help accelerate our expansion in this key
market. With this planned acquisition and our continuing focus on building
momentum in our core businesses, we believe Guess? is very well-positioned
for the long term."
Total net revenue for the third quarter of 2004 increased 18.7% to
$197.8 million from $166.7 million in the third quarter of 2003. The
Company's retail stores, including those in Canada, generated revenues of
$132.1 million in the 2004 third quarter, a 15.7% increase from
$114.2 million, as reported in the same prior year period. Comparable store
sales increased 10.9% during the third quarter of 2004 from the prior year
period. Net revenue from the Company's wholesale segment increased 21.4% to
$51.4 million in the third quarter of 2004 from $42.4 million in the same
year-ago period. Licensing segment net revenue increased 41.1% to
$14.3 million in the third quarter of 2004 from $10.1 million in the prior
year period. The Company operated 269 retail stores at third quarter-end 2004
versus 258 stores a year earlier.
Nine Month Results
For the nine months ended September 25, 2004, the Company's net earnings
increased to $14.7 million, or diluted earnings of $0.33 per share, from a net
loss of $4.5 million, or a diluted loss of $0.10 per share, in the comparable
2003 period. The 2003 nine-month period included a pre-tax restructuring,
impairment and severance charge of $0.8 million, $0.5 million net of tax, or
$0.01 per diluted share.
Total net revenue increased 15.5% to $505.3 million in the 2004 nine-month
period from $437.3 million in the prior year period. The Company's retail
stores, including those in Canada, generated revenue of $346.9 million for the
first nine months of 2004, an increase of 18.2% from $293.5 million for the
prior year period. Comparable store sales increased 12.8% during the first
nine months of 2004. Net revenue from the Company's wholesale segment in the
first nine months of 2004 increased 7.5% to $123.6 million from $114.9 million
in the first nine months of 2003. Licensing segment net revenue was
$34.8 million in the first nine months of 2004, a 20.7% increase from
$28.9 million for the same prior year period.
October 2004 Comparable Store Sales
The Company's October 2004 fiscal month began on September 26, 2004 and
will end on October 30, 2004. Based on current sales trends, the Company
expects October comparable store sales to increase in the mid single digits on
a percentage basis.
The Company will hold a conference call at 4:30 pm (ET) on October 28,
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 for 30 days.
Guess?, Inc. designs, markets, distributes and licenses a lifestyle
collection of contemporary apparel, accessories and related consumer products.
At September 25, 2004, the Company operated 269 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
September 25, September 27,
2004 2003
$ % $ %
Net revenue
Product sales $183,553 92.8% $156,549 93.9%
Net royalties 14,284 7.2% 10,125 6.1%
197,837 100.0% 166,674 100.0%
Cost of product sales 122,583 62.0% 105,078 63.0%
Gross profit 75,254 38.0% 61,596 37.0%
Selling, general and administrative
expenses 53,740 27.2% 48,133 28.9%
Restructuring, impairment and
severance charges -- -- -- --
Earnings (loss) from operations 21,514 10.8% 13,463 8.1%
Other (income) expense:
Interest expense 1,399 0.7% 1,733 1.1%
Interest Income (139) (0.1%) (17) (0.0%)
Other, net -- -- -- --
Earnings (loss) before income taxes
(benefit) 20,254 10.2% 11,747 7.0%
Income taxes (benefit) 8,428 4.2% 5,050 3.0%
Net earnings (loss) $11,826 6.0% $6,697 4.0%
Net earnings (loss) per share:
Basic $0.27 $0.15
Diluted $0.27 $0.15
Weighted number of shares outstanding:
Basic 44,093 43,237
Diluted 44,620 43,573
Guess?, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Nine Months Ended
September 25, September 27,
2004 2003
$ % $ %
Net revenue
Product sales $470,447 93.1% $408,435 93.4%
Net royalties 34,832 6.9% 28,865 6.6%
505,279 100.0% 437,300 100.0%
Cost of product sales 319,705 63.3% 293,368 67.1%
Gross profit 185,574 36.7% 143,932 32.9%
Selling, general and administrative
expenses 156,238 30.9% 144,764 33.1%
Restructuring, impairment and
severance charges -- -- 846 0.2%
Earnings (loss) from operations 29,336 5.8% (1,678) (0.4%)
Other (income) expense:
Interest expense 4,360 0.9% 6,379 1.5%
Interest Income (344) (0.1%) (100) (0.1%)
Other, net -- -- (26) (0.0%)
Earnings (loss) before income taxes
(benefit) 25,320 5.0% (7,931) (1.8%)
Income taxes (benefit) 10,607 2.1% (3,410) (0.8%)
Net earnings (loss) $14,713 2.9% $(4,521) (1.0%)
Net earnings (loss) per share:
Basic $0.33 $(0.10)
Diluted $0.33 $(0.10)
Weighted number of shares outstanding:
Basic 43,953 43,178
Diluted 44,515 43,178
Guess?, Inc. and Subsidiaries
Consolidated Segment Data
(in thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September 25, September 27, September 25, September 27,
2004 2003 2004 2003
Net revenue:
Retail
operations $132,133 $114,196 $346,905 $293,515
Wholesale
operations 51,420 42,353 123,542 114,920
Licensing
operations 14,284 10,125 34,832 28,865
$197,837 $166,674 $505,279 $437,300
Earnings (loss)
from
operations:
Retail
operations $12,743 $9,489 $23,611 $7,425
Wholesale
operations 3,839 2,439 2,676 (5,689)
Licensing
operations 12,130 8,464 28,178 23,175
Corporate
overhead (7,198) (6,929) (25,129) (26,589)
$21,514 $13,463 $29,336 $(1,678)
Guess?, Inc. and Subsidiaries
Selected Condensed Consolidated Balance Sheet Data
(in thousands)
(Unaudited)
September 25, December 31, September 27,
2004 2003 2003
ASSETS
Cash and cash equivalents $63,061 $67,163 $12,384
Restricted cash 3,927 4,509 4,748
Receivables, net 58,709 32,602 41,166
Inventories, net 105,497 83,530 104,671
Other current assets 18,712 22,840 30,577
Property and equipment, net 109,554 114,403 119,742
Other assets 37,469 37,718 31,040
Total Assets $396,929 $362,765 $344,328
LIABILITIES AND STOCKHOLDERS' EQUITY
Current installments of notes
payable and long-term debt $13,111 $13,931 $14,111
Other current liabilities 117,687 96,944 91,726
Notes payable and long-term
debt,excluding current
installments 48,416 54,161 58,222
Other liabilities 17,368 14,947 14,330
Stockholders' equity 200,347 182,782 165,939
Total Liabilities and
Stockholders' Equity $396,929 $362,765 $344,328
Guess?, Inc. and Subsidiaries
Condensed Consolidated Cash Flow Data
(in thousands)
(Unaudited)
Nine Months Ended
September 25, September 27,
2004 2003
Net cash provided by operating
activities $15,730 $2,490
Net cash used in investing activities (16,377) (14,440)
Net cash used in financing activities (3,443) (7,801)
Effect of exchange rates on cash (12) 382
Net decrease in cash and cash
equivalents (4,102) (19,369)
Cash and cash equivalents at the
beginning of the year 67,163 31,753
Cash and cash equivalents at the end
of the period $63,061 $12,384
Supplemental information:
Depreciation and amortization $26,294 $26,102
Rent 46,578 43,725
Guess?, Inc. and Subsidiaries
Retail Store Data
(Unaudited)
Nine Months Ended
September 25, September 27,
2004 2003
Number of stores at the beginning of
the year 265 249
Store openings 16 12
Store closures (12) (3)
Number of stores at the end of the
period 269 258
Total store square footage at the end
of the period 1,390,000 1,329,000
SOURCE Guess?, Inc.
-0- 10/28/2004
/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: FAS TEX REA
SU: ERN CCA