View:
United States securities and exchange commission logo
August 8, 2022
Dennis Secor
Chief Financial Officer
Guess?, Inc.
Strada Regina 44
Bioggio, Switzerland CH-6934
Re: Guess?, Inc.
Form 10-K for the
Fiscal Year ended January 29, 2022
Filed March 24,
2022
File No. 001-11893
Dear Mr. Secor:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year ended January 29, 2022
Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
Foreign Currency Volatility, page 36
1. We understand from your
various disclosures on pages 13, 15 and 37 that you have
operations in Russia
which accounted for about 3% of total revenues during the recently
completed fiscal year,
and that you expect sanctions and export-control measures imposed
by the United States,
United Kingdom and European Union governments will
significantly disrupt
your sales in the region, and may prevent you from performing under
existing contracts,
pursuing new business opportunities, and maintaining adequate
insurance coverage for
products and facilities.
You also explain that
such measures could disrupt your supply chain, partners, customers
and the operations of
your distributor in the region and surrounding regions.
Dennis Secor
FirstName
Guess?, Inc.LastNameDennis Secor
Comapany
August NameGuess?, Inc.
8, 2022
August
Page 2 8, 2022 Page 2
FirstName LastName
We see that you have disclosures on pages 25, 36 and 55 of your
periodic report for the
first quarter of your current fiscal year having details of a put
arrangement under which
you may be required to purchase the minority interest in your Russian
subsidiary, and
concerning exposure to exchange rate fluctuations involving the
Russian rouble, though
without details of the specific contracts involved or quantification
of exposure.
Given the possibility of material adverse effects, please expand your
disclosures to more
clearly describe how the Russia-Ukraine conflict may impact your
operations. As part of
your expanded disclosures, please address the following points:
Describe the extent to which you have operations, facilities,
fixed assets, inventories,
business relationships, and transactions within Russia, Belarus,
and Ukraine, or with
entities or persons related to these countries, including the
activities and significance
of your subsidiary/joint-venture in Russia and distributor
operations in Ukraine.
Describe the sanctions and trade restrictions that have been
imposed on operations
within Russia, Belarus, and Ukraine, including related entities
or persons, and explain
how you have assessed the applicability of such measures to your
operations.
Clarify the nature of any uncertainties associated with
positions that you have
formulated of being outside the scope of such measures and the
implications of any
reasonably possible changes in those uncertainties and your
positions.
Quantify the amounts that you have capitalized for assets
situated in Russia, Belarus,
and Ukraine, and describe the nature of such assets.
Quantify the amounts that you have capitalized for your
investment in the Russian
subsidiary/joint-venture and the extent of any guarantees related
to its operations.
Clarify how you have assessed the need for impairment testing
of your long-lived
assets in Russia, Belarus and Ukraine pursuant to FASB ASC
360-10-35-21 as of
April 30, 2022, indicate the results of any such testing, and
describe the key
assumptions made in arriving at your conclusions, including
expectations regarding
the possible need to perform in the event the put option is
exercised.
Quantify the amount of any revenue backlog associated with
contractual
arrangements involving operations in these countries that either
have or may become
subject to sanctions or trade restrictions, indicate the extent
to which such backlog
pertains to sales of products or sales of services, and identify
the periods over which
your contractual obligations were expected to be performed.
Describe the nature and extent of any direct or indirect
reliance on goods or services
sourced in Russia, Belarus, and Ukraine, or countries that are
supportive of Russia,
and the extent of any actual or potential disruptions in your
supply chain and business
Dennis Secor
Guess?, Inc.
August 8, 2022
Page 3
relationships in or having connections to these countries.
Explain how disruptions to your distributor operations in
Russia, Belarus, and
Ukraine have impacted your ability to provide services and sell
products.
Clarify with quantifications the scope of assessments made in
evaluating the effects
of the conflict on your operations, including possible
impairments, your foreign
currency positions, and any tax related matters.
Describe any plans to resituate and restore supply and
distribution channels that have
been disrupted or which are at risk, and the timeframe over which
this may occur.
Results of Operations, page 42
2. Please expand your disclosure to address any known trends, events or
uncertainties that
have had, or that are reasonably likely to have, a material impact on
your cash flows,
liquidity, capital resources, cash requirements, financial position,
or results of operations,
as may be attributable to the inflation risk that you discuss on page
19.
Please clarify the extent to which your revenues and cost of product
sales have been or are
expected to be impacted by inflation, and discuss any plans that you
have to respond to or
counter any adverse circumstances.
3. We note that your disclosure concerning gross profit on page 43
includes commentary on
the composition of your cost of product sales measure, indicating the
measure reflects a
portion of distribution costs related to your retail business while
excluding distribution
costs related to your wholesale operations.
Please describe for us the nature of the costs that you consider to be
distribution costs for
the retail and wholesale operations and explain your reasons for
handling these differently
in measuring cost of product sales. Also explain how you calculated
the portion of retain
business distribution costs attributed to the measure and your
rationale.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff. You may contact Lily Dang at (202) 551-3867 or Jenifer
Gallagher at (202)
551-3706 if you have questions regarding comments on the financial statements
and related
matters. Please contact Karl Hiller, Branch Chief at (202) 551-3686 with any
other questions.
FirstName LastNameDennis Secor Sincerely,
Comapany NameGuess?, Inc.
Division of
Corporation Finance
August 8, 2022 Page 3
FirstName LastName Office of
Energy & Transportation