Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Aug. 01, 2015 | Sep. 01, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | GUESS INC | |
Trading Symbol | GES | |
Entity Central Index Key | 912,463 | |
Document Type | 10-Q | |
Document Period End Date | Aug. 1, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 85,759,076 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Aug. 01, 2015 | Jan. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 470,946 | $ 483,483 |
Accounts receivable, net | 198,735 | 216,205 |
Inventories | 335,460 | 319,078 |
Other current assets | 85,013 | 92,593 |
Total current assets | 1,090,154 | 1,111,359 |
Property and equipment, net | 241,579 | 259,524 |
Goodwill | 33,766 | 34,133 |
Other intangible assets, net | 8,009 | 9,745 |
Long-term deferred tax assets | 66,513 | 68,747 |
Other assets | 123,591 | 117,897 |
Total assets | 1,563,612 | 1,601,405 |
Current liabilities: | ||
Current portion of capital lease obligations | 4,840 | 1,548 |
Accounts payable | 159,244 | 159,924 |
Accrued expenses | 155,132 | 140,494 |
Total current liabilities | 319,216 | 301,966 |
Long-term debt and capital lease obligations | 2,057 | 6,165 |
Deferred rent and lease incentives | 78,820 | 81,761 |
Other long-term liabilities | 99,721 | 117,630 |
Total liabilities | 499,814 | 507,522 |
Redeemable noncontrolling interests | $ 5,349 | $ 4,437 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity: | ||
Preferred stock, $.01 par value. Authorized 10,000,000 shares; no shares issued and outstanding | $ 0 | $ 0 |
Common stock, $.01 par value. Authorized 150,000,000 shares; issued 139,975,804 and 139,559,000 shares, outstanding 85,763,440 and 85,323,154 shares, as of August 1, 2015 and January 31, 2015, respectively | 858 | 853 |
Paid-in capital | 459,838 | 453,546 |
Retained earnings | 1,247,339 | 1,265,524 |
Accumulated other comprehensive loss | (142,804) | (127,065) |
Treasury stock, 54,212,364 and 54,235,846 shares as of August 1, 2015 and January 31, 2015, respectively | (518,778) | (519,002) |
Guess, Inc. stockholders’ equity | 1,046,453 | 1,073,856 |
Nonredeemable noncontrolling interests | 11,996 | 15,590 |
Total stockholders’ equity | 1,058,449 | 1,089,446 |
Total liabilities and stockholders' equity | $ 1,563,612 | $ 1,601,405 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Aug. 01, 2015 | Jan. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 139,975,804 | 139,559,000 |
Common stock, shares outstanding | 85,763,440 | 85,323,154 |
Treasury stock, shares | 54,212,364 | 54,235,846 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2015 | Aug. 02, 2014 | Aug. 01, 2015 | Aug. 02, 2014 | |
Income Statement [Abstract] | ||||
Product sales | $ 520,937 | $ 581,779 | $ 973,896 | $ 1,078,707 |
Net royalties | 25,327 | 26,792 | 51,192 | 52,405 |
Net revenue | 546,264 | 608,571 | 1,025,088 | 1,131,112 |
Cost of product sales | 348,147 | 391,794 | 661,486 | 738,104 |
Gross profit | 198,117 | 216,777 | 363,602 | 393,008 |
Selling, general and administrative expenses | 171,916 | 186,919 | 333,048 | 365,127 |
Earnings from operations | 26,201 | 29,858 | 30,554 | 27,881 |
Other income (expense): | ||||
Interest expense | (729) | (772) | (1,164) | (1,297) |
Interest income | 239 | 320 | 511 | 725 |
Other income, net | 3,708 | 4,766 | 6,334 | 3,647 |
Total other income | 3,218 | 4,314 | 5,681 | 3,075 |
Earnings before income tax expense | 29,419 | 34,172 | 36,235 | 30,956 |
Income tax expense | 10,940 | 11,900 | 13,769 | 10,871 |
Net earnings | 18,479 | 22,272 | 22,466 | 20,085 |
Net earnings attributable to noncontrolling interests | 190 | 318 | 836 | 232 |
Net earnings attributable to Guess, Inc. | $ 18,289 | $ 21,954 | $ 21,630 | $ 19,853 |
Net earnings per common share attributable to common stockholders (Note 2): | ||||
Basic (in dollars per share) | $ 0.21 | $ 0.26 | $ 0.25 | $ 0.23 |
Diluted (in dollars per share) | $ 0.21 | $ 0.26 | $ 0.25 | $ 0.23 |
Weighted average common shares outstanding attributable to common stockholders (Note 2): | ||||
Basic (in shares) | 85,004 | 84,573 | 84,985 | 84,536 |
Diluted (in shares) | 85,290 | 84,799 | 85,132 | 84,765 |
Dividends declared per common share (in dollars per share) | $ 0.225 | $ 0.225 | $ 0.45 | $ 0.45 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2015 | Aug. 02, 2014 | Aug. 01, 2015 | Aug. 02, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 18,479 | $ 22,272 | $ 22,466 | $ 20,085 |
Foreign currency translation adjustment | ||||
Gains (losses) arising during the period | (20,933) | (19,708) | (21,636) | 2,542 |
Derivative financial instruments designated as cash flow hedges | ||||
Gains (losses) arising during the period | 5,721 | 1,867 | 4,426 | (812) |
Less income tax effect | (1,137) | (515) | (768) | 106 |
Reclassification to net earnings for (gains) losses realized | (3,523) | 290 | (5,759) | 815 |
Less income tax effect | 511 | 391 | 812 | 370 |
Marketable securities | ||||
Losses arising during the period | (7) | (40) | (14) | (66) |
Less income tax effect | 3 | 15 | 6 | 25 |
Reclassification to net earnings for gains realized | 0 | 0 | 0 | (87) |
Less income tax effect | 0 | 0 | 0 | 33 |
Defined benefit plans | ||||
Actuarial gain | 11,378 | 0 | 11,378 | 0 |
Less income tax effect | (4,352) | 0 | (4,352) | 0 |
Actuarial loss amortization | 430 | 235 | 943 | 469 |
Prior service credit amortization | (39) | (58) | (97) | (116) |
Curtailment | (1,651) | 0 | (1,651) | 0 |
Less income tax effect | 522 | (68) | 373 | (135) |
Total comprehensive income | 5,402 | 4,681 | 6,127 | 23,229 |
Less comprehensive income (loss) attributable to noncontrolling interests: | ||||
Net earnings | 190 | 318 | 836 | 232 |
Foreign currency translation adjustment | (236) | (284) | (600) | 117 |
Amounts attributable to noncontrolling interests | (46) | 34 | 236 | 349 |
Comprehensive income attributable to Guess, Inc. | $ 5,448 | $ 4,647 | $ 5,891 | $ 22,880 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Aug. 01, 2015 | Aug. 02, 2014 | |
Cash flows from operating activities: | ||
Net earnings | $ 22,466 | $ 20,085 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization of property and equipment | 35,363 | 41,363 |
Amortization of intangible assets | 1,080 | 1,291 |
Share-based compensation expense | 8,052 | 7,613 |
Unrealized forward contract gains | (1,979) | (1,047) |
Net (gain) loss on disposition of long-term assets and property and equipment | (171) | 5,986 |
Other items, net | 167 | 847 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 12,943 | 42,381 |
Inventories | (21,791) | (43,485) |
Prepaid expenses and other assets | (5,624) | (8,484) |
Accounts payable and accrued expenses | 18,432 | (30,286) |
Deferred rent and lease incentives | (2,455) | (442) |
Other long-term liabilities | (9,747) | (5,459) |
Net cash provided by operating activities | 56,736 | 30,363 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (24,963) | (32,316) |
Changes in other assets | 1,768 | 319 |
Proceeds from sale of investment | 0 | 598 |
Acquisition of businesses, net of cash acquired | (846) | (309) |
Net cash settlement of forward contracts | 6,814 | (842) |
Net cash used in investing activities | (17,227) | (32,550) |
Cash flows from financing activities: | ||
Payment of debt issuance costs | (945) | 0 |
Proceeds from borrowings | 581 | 786 |
Repayment of capital lease obligations and borrowings | (756) | (3,720) |
Dividends paid | (38,520) | (38,455) |
Noncontrolling interest capital distributions | (3,830) | 0 |
Issuance of common stock, net of nonvested award repurchases | (1,052) | 619 |
Excess tax benefits from share-based compensation | 79 | 148 |
Net cash used in financing activities | (44,443) | (40,622) |
Effect of exchange rates on cash and cash equivalents | (7,603) | 1,383 |
Net change in cash and cash equivalents | (12,537) | (41,426) |
Cash and cash equivalents at the beginning of the year | 483,483 | 502,945 |
Cash and cash equivalents at the end of the period | 470,946 | 461,519 |
Supplemental cash flow data: | ||
Interest paid | 508 | 870 |
Income taxes paid | $ 14,590 | $ 46,208 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Aug. 01, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation In the opinion of management, the accompanying unaudited condensed consolidated financial statements of Guess?, Inc. and its subsidiaries (the “Company”) contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the condensed consolidated balance sheets as of August 1, 2015 and January 31, 2015 , the condensed consolidated statements of income and comprehensive income for the three and six months ended August 1, 2015 and August 2, 2014 and the condensed consolidated statements of cash flows for the six months ended August 1, 2015 and August 2, 2014 . The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they have been condensed and do not include all of the information and footnotes required by GAAP for complete financial statements. The results of operations for the three and six months ended August 1, 2015 are not necessarily indicative of the results of operations to be expected for the full fiscal year. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended January 31, 2015 . The three and six months ended August 1, 2015 had the same number of days as the three and six months ended August 2, 2014 . All references herein to “fiscal 2016 ,” “fiscal 2015 ” and “fiscal 2014 ” represent the results of the 52 -week fiscal year ending January 30, 2016 and the 52 -week fiscal years ended January 31, 2015 and February 1, 2014 , respectively. Principles of Consolidation The condensed consolidated financial statements include the accounts of Guess?, Inc., its wholly-owned direct and indirect subsidiaries and its non wholly-owned subsidiaries and joint ventures in which the Company has a controlling financial interest and is determined to be the primary beneficiary. Accordingly, all references herein to “Guess?, Inc.” include the consolidated results of the Company, its wholly-owned subsidiaries and its joint ventures. All intercompany accounts and transactions are eliminated during the consolidation process. Reclassifications The Company has made certain reclassifications to prior year amounts to conform to the current period presentation within the accompanying notes to the condensed consolidated financial statements. New Accounting Guidance In April 2014, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance which raises the threshold for disposals to qualify as discontinued operations. Under this new guidance, a discontinued operation is (1) a component of an entity or group of components that have been disposed of or are classified as held for sale and represent a strategic shift that has or will have a major effect on an entity’s operations and financial results, or (2) an acquired business that is classified as held for sale on the acquisition date. This guidance also requires expanded or new disclosures for discontinued operations, individually material disposals that do not meet the definition of a discontinued operation, an entity’s continuing involvement with a discontinued operation following disposal and retained equity method investments in a discontinued operation. The Company adopted this guidance effective February 1, 2015. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements for the three and six months ended August 1, 2015 . In May 2014, the FASB issued a comprehensive new revenue recognition standard which will supersede previous existing revenue recognition guidance. The standard creates a five-step model for revenue recognition that requires companies to exercise judgment when considering contract terms and relevant facts and circumstances. The five-step model includes (1) identifying the contract, (2) identifying the separate performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations and (5) recognizing revenue when each performance obligation has been satisfied. The standard also requires expanded disclosures surrounding revenue recognition. The standard is effective for fiscal periods beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, and allows for either full retrospective or modified retrospective adoption. Early adoption is permitted for fiscal periods beginning after December 15, 2016, which will be the Company’s first quarter of fiscal 2018. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements, including the choice of application method upon adoption. In August 2014, the FASB issued authoritative guidance that requires an entity’s management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern and requires additional disclosures if certain criteria are met. This guidance is effective for fiscal periods ending after December 15, 2016, which will be the Company’s fourth quarter of fiscal 2017, with early adoption permitted. The adoption of this guidance is not expected to impact the Company’s consolidated financial statements or related disclosures. In February 2015, the FASB issued authoritative guidance which modifies existing consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. This guidance is effective for fiscal periods beginning after December 15, 2015, which will be the Company’s first quarter of fiscal 2017, and allows for either full retrospective or modified retrospective adoption, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements, including the choice of application method upon adoption. In April 2015, the FASB issued authoritative guidance to simplify the presentation of debt issuance costs by requiring such costs to be presented as a deduction from the corresponding debt liability. This guidance is effective for fiscal years beginning after December 15, 2015, which will be the Company’s first quarter of fiscal 2017, and requires retrospective adoption, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures. In April 2015, the FASB issued authoritative guidance which would permit an entity to measure its defined benefit plan assets and obligations using the calendar month-end that is closest to the entity’s fiscal period-end for interim and annual periods. This guidance is effective for fiscal years beginning after December 15, 2015, which will be the Company’s first quarter of fiscal 2017, and requires prospective adoption, with early adoption permitted. The Company is currently evaluating whether it will adopt this guidance, but if adopted, this guidance is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures. In July 2015, the FASB issued authoritative guidance to simplify the subsequent measurement of inventories by replacing the lower of cost or market test with a lower of cost and net realizable value test. This guidance is effective for fiscal years beginning after December 15, 2016, which will be the Company’s first quarter of fiscal 2018, and requires prospective adoption, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Aug. 01, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share represents net earnings attributable to common stockholders divided by the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding does not include restricted stock units with forfeitable dividend rights that have been classified as issued and outstanding but are considered contingently returnable as a result of certain service conditions. These restricted stock units are considered common equivalent shares outstanding and are excluded from the basic earnings per share calculation until the respective service conditions have been met. Diluted earnings per share represents net earnings attributable to common stockholders divided by the weighted average number of common shares outstanding, inclusive of the dilutive impact of common equivalent shares outstanding during the period. However, nonvested restricted stock awards (referred to as participating securities) are excluded from the dilutive impact of common equivalent shares outstanding in accordance with authoritative guidance under the two-class method since the nonvested restricted stockholders are entitled to participate in dividends declared on common stock as if the shares were fully vested and hence are deemed to be participating securities. Under the two-class method, earnings attributable to nonvested restricted stockholders are excluded from net earnings attributable to common stockholders for purposes of calculating basic and diluted earnings per common share. However, net losses are not allocated to nonvested restricted stockholders since they are not contractually obligated to share in the losses of the Company. In addition, the Company has granted certain nonvested stock units that are subject to certain performance-based or market-based vesting conditions as well as continued service requirements through the respective vesting periods. These nonvested stock units are included in the computation of diluted net earnings per common share attributable to common stockholders only to the extent that the underlying performance-based or market-based vesting conditions are satisfied as of the end of the reporting period, or would be considered satisfied if the end of the reporting period were the end of the related contingency period, and the results would be dilutive under the treasury stock method. The computation of basic and diluted net earnings per common share attributable to common stockholders is as follows (in thousands, except per share data): Three Months Ended Six Months Ended Aug 1, 2015 Aug 2, 2014 Aug 1, 2015 Aug 2, 2014 Net earnings attributable to Guess?, Inc. $ 18,289 $ 21,954 $ 21,630 $ 19,853 Less net earnings attributable to nonvested restricted stockholders 143 167 227 292 Net earnings attributable to common stockholders $ 18,146 $ 21,787 $ 21,403 $ 19,561 Weighted average common shares used in basic computations 85,004 84,573 84,985 84,536 Effect of dilutive securities: Stock options and restricted stock units 286 226 147 229 Weighted average common shares used in diluted computations 85,290 84,799 85,132 84,765 Net earnings per common share attributable to common stockholders: Basic $ 0.21 $ 0.26 $ 0.25 $ 0.23 Diluted $ 0.21 $ 0.26 $ 0.25 $ 0.23 For the three months ended August 1, 2015 and August 2, 2014 , equity awards granted for 2,525,300 and 1,666,111 , respectively, of the Company’s common shares and for the six months ended August 1, 2015 and August 2, 2014 , equity awards granted for 2,473,325 and 1,549,291 , respectively, of the Company’s common shares were outstanding but were excluded from the computation of diluted weighted average common shares and common share equivalents outstanding because the assumed proceeds, as calculated under the treasury stock method, resulted in these awards being antidilutive. For the three and six months ended August 1, 2015 , the Company also excluded 425,866 nonvested stock units which are subject to the achievement of performance-based or market-based vesting conditions from the computation of diluted weighted average common shares and common share equivalents outstanding because these conditions were not achieved as of August 1, 2015 . For the three and six months ended August 2, 2014 , the Company excluded 259,700 nonvested stock units which were subject to the achievement of performance-based vesting conditions from the computation of diluted weighted average common shares and common share equivalents outstanding because these conditions were not achieved as of August 2, 2014 . Share Repurchase Program On June 26, 2012, the Company’s Board of Directors authorized a program to repurchase, from time-to-time and as market and business conditions warrant, up to $ 500 million of the Company’s common stock (the “2012 Share Repurchase Program”). Repurchases under the program may be made on the open market or in privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means. There is no minimum or maximum number of shares to be repurchased under the program, which may be discontinued at any time, without prior notice. As of August 1, 2015 , the Company had remaining authority under the 2012 Share Repurchase Program to purchase $ 495.8 million of its common stock. There were no share repurchases during the three and six months ended August 1, 2015 and August 2, 2014 . |
Stockholders' Equity and Redeem
Stockholders' Equity and Redeemable Noncontrolling Interests | 6 Months Ended |
Aug. 01, 2015 | |
Stockholders' Equity and Redeemable Noncontrolling Interests [Abstract] | |
Stockholders' Equity and Redeemable Noncontrolling Interests | Stockholders’ Equity and Redeemable Noncontrolling Interests A reconciliation of common stock outstanding, treasury stock and the total carrying amount of total stockholders’ equity, Guess?, Inc. stockholders’ equity and stockholders’ equity attributable to nonredeemable and redeemable noncontrolling interests for the fiscal year ended January 31, 2015 and six months ended August 1, 2015 is as follows (in thousands, except share data): Shares Stockholders’ Equity Common Stock Treasury Stock Guess?, Inc. Stockholders’ Equity Nonredeemable Noncontrolling Interests Total Redeemable Noncontrolling Interests Balance at February 1, 2014 84,962,345 54,283,384 $ 1,154,514 $ 15,472 $ 1,169,986 $ 5,830 Net earnings — — 94,570 2,614 97,184 — Foreign currency translation adjustment — — (114,566 ) (2,141 ) (116,707 ) (788 ) Gain on derivative financial instruments designated as cash flow hedges, net of income tax of ($721) — — 7,270 — 7,270 — Loss on marketable securities, net of income tax of $61 — — (106 ) — (106 ) — Prior service credit amortization and actuarial valuation loss and related amortization on defined benefit plans, net of income tax of $2,335 — — (5,862 ) — (5,862 ) — Issuance of common stock under stock compensation plans, net of tax effect 313,271 — (1,937 ) — (1,937 ) — Issuance of stock under Employee Stock Purchase Plan 47,538 (47,538 ) 1,008 — 1,008 — Share-based compensation — — 15,342 — 15,342 — Dividends — — (76,982 ) — (76,982 ) — Noncontrolling interest capital distribution — — — (355 ) (355 ) — Redeemable noncontrolling interest redemption value adjustment — — 605 — 605 (605 ) Balance at January 31, 2015 85,323,154 54,235,846 $ 1,073,856 $ 15,590 $ 1,089,446 $ 4,437 Net earnings — — 21,630 836 22,466 — Foreign currency translation adjustment — — (21,036 ) (600 ) (21,636 ) (308 ) Loss on derivative financial instruments designated as cash flow hedges, net of income tax of $44 — — (1,289 ) — (1,289 ) — Loss on marketable securities, net of income tax of $6 — — (8 ) — (8 ) — Actuarial valuation gain (loss) and related amortization, curtailment and prior service credit amortization on defined benefit plans, net of income tax of ($3,979) — — 6,594 — 6,594 — Issuance of common stock under stock compensation plans, net of tax effect 416,804 — (1,842 ) — (1,842 ) — Issuance of stock under Employee Stock Purchase Plan 23,482 (23,482 ) 374 — 374 — Share-based compensation — — 8,052 — 8,052 — Dividends — — (38,658 ) — (38,658 ) — Noncontrolling interest capital distribution — — — (3,830 ) (3,830 ) — Redeemable noncontrolling interest redemption value adjustment — — (1,220 ) — (1,220 ) 1,220 Balance at August 1, 2015 85,763,440 54,212,364 $ 1,046,453 $ 11,996 $ 1,058,449 $ 5,349 Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss), net of related income taxes, for the three and six months ended August 1, 2015 and August 2, 2014 are as follows (in thousands): Three Months Ended Aug 1, 2015 Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Marketable Securities Defined Benefit Plans Total Balance at May 2, 2015 $ (121,908 ) $ 4,296 $ (7 ) $ (12,344 ) $ (129,963 ) Gains (losses) arising during the period (20,697 ) 4,584 (4 ) 7,026 (9,091 ) Reclassification to net earnings for gains realized — (3,012 ) — (738 ) (3,750 ) Net other comprehensive income (loss) (20,697 ) 1,572 (4 ) 6,288 (12,841 ) Balance at August 1, 2015 $ (142,605 ) $ 5,868 $ (11 ) $ (6,056 ) $ (142,804 ) Six Months Ended Aug 1, 2015 Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Marketable Securities Defined Benefit Plans Total Balance at January 31, 2015 $ (121,569 ) $ 7,157 $ (3 ) $ (12,650 ) $ (127,065 ) Gains (losses) arising during the period (21,036 ) 3,658 (8 ) 7,026 (10,360 ) Reclassification to net earnings for gains realized — (4,947 ) — (432 ) (5,379 ) Net other comprehensive income (loss) (21,036 ) (1,289 ) (8 ) 6,594 (15,739 ) Balance at August 1, 2015 $ (142,605 ) $ 5,868 $ (11 ) $ (6,056 ) $ (142,804 ) Three Months Ended Aug 2, 2014 Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Marketable Securities Defined Benefit Plans Total Balance at May 3, 2014 $ 14,846 $ (1,667 ) $ 33 $ (6,679 ) $ 6,533 Gains (losses) arising during the period (19,424 ) 1,352 (25 ) — (18,097 ) Reclassification to net earnings for losses realized — 681 — 109 790 Net other comprehensive income (loss) (19,424 ) 2,033 (25 ) 109 (17,307 ) Balance at August 2, 2014 $ (4,578 ) $ 366 $ 8 $ (6,570 ) $ (10,774 ) Six Months Ended Aug 2, 2014 Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Marketable Securities Defined Benefit Plans Total Balance at February 1, 2014 $ (7,003 ) $ (113 ) $ 103 $ (6,788 ) $ (13,801 ) Gains (losses) arising during the period 2,425 (706 ) (41 ) — 1,678 Reclassification to net earnings for (gains) losses realized — 1,185 (54 ) 218 1,349 Net other comprehensive income (loss) 2,425 479 (95 ) 218 3,027 Balance at August 2, 2014 $ (4,578 ) $ 366 $ 8 $ (6,570 ) $ (10,774 ) Details on reclassifications out of accumulated other comprehensive income (loss) to net earnings during the three and six months ended August 1, 2015 and August 2, 2014 are as follows (in thousands): Three Months Ended Six Months Ended Location of (Gain) Loss Reclassified from Accumulated OCI into Earnings Aug 1, 2015 Aug 2, 2014 Aug 1, 2015 Aug 2, 2014 Derivative financial instruments designated as cash flow hedges: Foreign exchange currency contracts $ (3,193 ) $ 265 $ (4,943 ) $ 759 Cost of product sales Foreign exchange currency contracts (330 ) 25 (816 ) 56 Other income/expense Less income tax effect 511 391 812 370 Income tax expense (3,012 ) 681 (4,947 ) 1,185 Marketable securities: Available-for-sale securities — — — (87 ) Other income/expense Less income tax effect — — — 33 Income tax expense — — — (54 ) Defined benefit plans: Actuarial loss amortization 430 235 943 469 (1) Prior service credit amortization (39 ) (58 ) (97 ) (116 ) (1) Curtailment (1,651 ) — (1,651 ) — (1) Less income tax effect 522 (68 ) 373 (135 ) Income tax expense (738 ) 109 (432 ) 218 Total reclassifications during the period $ (3,750 ) $ 790 $ (5,379 ) $ 1,349 __________________________________ (1) These accumulated other comprehensive income (loss) components are included in the computation of net periodic defined benefit pension cost. Refer to Note 13 for further information. Redeemable Noncontrolling Interests The Company is party to a put arrangement with respect to the common securities that represent the remaining noncontrolling interest from the acquisition of its majority-owned subsidiary, Guess Sud SAS (“Guess Sud”). The put arrangement for Guess Sud, representing 40% of the total outstanding equity interest of that subsidiary, may be exercised at the discretion of the noncontrolling interest holders by providing written notice to the Company any time after January 30, 2012 . The put arrangement is recorded on the balance sheet at its expected redemption value based on a method which approximates fair value and classified as a redeemable noncontrolling interest outside of permanent equity. The redemption value of the Guess Sud redeemable put arrangement was $ 4.5 million and $ 3.4 million as of August 1, 2015 and January 31, 2015 , respectively. The Company is also party to a put arrangement with respect to the common securities that represent the remaining noncontrolling interest for its majority-owned subsidiary, Guess Brasil Comércio e Distribuição S.A. (“Guess Brazil”), which was established through a majority-owned joint venture during fiscal 2014. The put arrangement for Guess Brazil, representing 40% of the total outstanding equity interest of that subsidiary, may be exercised at the discretion of the noncontrolling interest holder by providing written notice to the Company beginning in the sixth year of the agreement, or sooner in certain limited circumstances, and every third anniversary from the end of the sixth year thereafter subject to certain time restrictions. The redemption value of the Guess Brazil put arrangement is based on a multiple of Guess Brazil’s earnings before interest, taxes, depreciation and amortization subject to certain adjustments. The carrying value of the redeemable noncontrolling interest related to Guess Brazil was $0.8 million and $1.0 million as of August 1, 2015 and January 31, 2015 , respectively. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Aug. 01, 2015 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable is summarized as follows (in thousands): Aug 1, 2015 Jan 31, 2015 Trade $ 208,976 $ 229,618 Royalty 10,830 10,118 Other 8,404 8,389 228,210 248,125 Less allowance for doubtful accounts 29,475 31,920 $ 198,735 $ 216,205 Accounts receivable consists of trade receivables relating primarily to the Company’s wholesale business in Europe, and to a lesser extent, to its wholesale businesses in the Americas and Asia, royalty receivables relating to its licensing operations, and certain other receivables. Other receivables generally relate to amounts due to the Company that result from activities that are not related to the direct sale of the Company’s products or collection of royalties. The accounts receivable allowance includes allowances for doubtful accounts, wholesale sales returns and wholesale markdowns. Retail sales returns allowances are included in accrued expenses. |
Inventories
Inventories | 6 Months Ended |
Aug. 01, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following (in thousands): Aug 1, 2015 Jan 31, 2015 Raw materials $ 3,409 $ 4,548 Work in progress 59 77 Finished goods 331,992 314,453 $ 335,460 $ 319,078 The above balances include an allowance to write down inventories to the lower of cost or market of $ 18.6 million and $ 19.7 million as of August 1, 2015 and January 31, 2015 , respectively. |
Restructuring Charges
Restructuring Charges | 6 Months Ended |
Aug. 01, 2015 | |
Restructuring Charges [Abstract] | |
Restructuring Charges | Restructuring Charges During the first quarter of fiscal 2014, the Company implemented plans to streamline its structure and reduce expenses in both Europe and North America . During the second quarter of fiscal 2014, the Company expanded these plans to include the consolidation and streamlining of certain operations in Europe and Asia. The Company incurred total restructuring charges of $12.4 million under these plans related primarily to severance, impairment and lease termination costs during fiscal 2014. There were no restructuring charges incurred during the three and six months ended August 1, 2015 and August 2, 2014 related to these plans. The Company does not expect significant future cash-related charges to be incurred as the actions under these plans were substantially completed during fiscal 2014. As of August 1, 2015 , the Company had a balance of approximately $0.2 million in accrued expenses for amounts expected to be paid during the remainder of fiscal 2016. At January 31, 2015 , the Company had a balance of approximately $0.3 million in accrued expenses related to these restructuring activities. The following table summarizes restructuring activities related primarily to severance during the fiscal year ended January 31, 2015 and six months ended August 1, 2015 (in thousands): Total Balance at February 1, 2014 $ 4,578 Cash payments (2,952 ) Foreign currency and other adjustments (1,350 ) Balance at January 31, 2015 $ 276 Cash payments (39 ) Foreign currency and other adjustments (56 ) Balance at August 1, 2015 $ 181 |
Income Taxes
Income Taxes | 6 Months Ended |
Aug. 01, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense for the interim periods was computed using the effective tax rate estimated to be applicable for the full fiscal year. The Company’s effective income tax rate in creased to 38.0% for the six months ended August 1, 2015 from 35.1% for the six months ended August 2, 2014 . The in crease in the effective income tax rate was due primarily to a larger mix of taxable income in higher taxable jurisdictions and higher non-deductible compensation costs during the six months ended August 1, 2015 compared to the same prior-year period. From time-to-time, the Company is subject to routine compliance reviews on various tax matters around the world in the ordinary course of business. As of August 1, 2015 , several income tax audits were underway for various periods in multiple jurisdictions. The Company accrues an amount for its estimate of additional income tax liability which the Company, more likely than not, could incur as a result of the ultimate resolution of income tax audits (“uncertain tax positions”). The Company reviews and updates the estimates used in the accrual for uncertain tax positions as more definitive information becomes available from taxing authorities, upon completion of tax audits, upon expiration of statutes of limitation, or upon occurrence of other events. The Company had aggregate accruals for uncertain tax positions, including penalties and interest, of $ 14.3 million and $14.4 million as of August 1, 2015 and January 31, 2015 , respectively. |
Segment Information
Segment Information | 6 Months Ended |
Aug. 01, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company’s businesses are grouped into five reportable segments for management and internal financial reporting purposes: Americas Retail , Europe , Asia , Americas Wholesale and Licensing . Beginning in the second quarter of fiscal 2016, the Company changed the names of its “North American Retail” and “North American Wholesale” segments to “Americas Retail” and “Americas Wholesale” to better reflect that these segments are inclusive of its operations in North America as well as Central and South America. There have been no changes to the underlying reporting in either segment. The Company’s operating segments are the same as its reportable segments. Management evaluates segment performance based primarily on revenues and earnings (loss) from operations before restructuring charges, if any. The Company believes this segment reporting reflects how its five business segments are managed and how each segment’s performance is evaluated by the Company’s chief operating decision maker to assess performance and make resource allocation decisions. The Americas Retail segment includes the Company’s retail and e-commerce operations in North and Central America and its retail operations in South America. The Europe segment includes the Company’s wholesale, retail and e-commerce operations in Europe and the Middle East. The Asia segment includes the Company’s wholesale, retail and e-commerce operations in Asia. The Americas Wholesale segment includes the Company’s wholesale operations in the Americas. The Licensing segment includes the worldwide licensing operations of the Company. The business segment operating results exclude corporate overhead costs, which consist of shared costs of the organization, and restructuring charges. These costs are presented separately and generally include, among other things, the following unallocated corporate costs: accounting and finance, executive compensation, facilities, global advertising and marketing, human resources, information technology and legal. Net revenue and earnings (loss) from operations are summarized as follows for the three and six months ended August 1, 2015 and August 2, 2014 (in thousands): Three Months Ended Six Months Ended Aug 1, 2015 Aug 2, 2014 Aug 1, 2015 Aug 2, 2014 Net revenue: Americas Retail(1) $ 232,456 $ 244,000 $ 446,705 $ 472,344 Europe 199,375 235,260 336,772 394,418 Asia 56,745 64,267 120,780 134,385 Americas Wholesale(1) 32,361 38,252 69,639 77,560 Licensing 25,327 26,792 51,192 52,405 Total net revenue $ 546,264 $ 608,571 $ 1,025,088 $ 1,131,112 Earnings (loss) from operations: Americas Retail(1) $ 5,244 $ (4,662 ) $ (1,965 ) $ (13,061 ) Europe 18,186 24,513 14,518 17,881 Asia 887 2,264 5,500 5,617 Americas Wholesale(1) 4,872 5,167 11,619 12,920 Licensing 22,415 24,909 45,440 47,630 Corporate Overhead (25,403 ) (22,333 ) (44,558 ) (43,106 ) Total earnings from operations $ 26,201 $ 29,858 $ 30,554 $ 27,881 __________________________________ (1) Beginning in the second quarter of fiscal 2016, the Company changed the names of its “North American Retail” and “North American Wholesale” segments to “Americas Retail” and “Americas Wholesale” to better reflect that these segments are inclusive of its operations in North America as well as Central and South America. There have been no changes to the underlying reporting in either segment. Due to the seasonal nature of the Company’s business segments, the above net revenue and operating results are not necessarily indicative of the results that may be expected for the full fiscal year. |
Borrowings and Capital Lease Ob
Borrowings and Capital Lease Obligations | 6 Months Ended |
Aug. 01, 2015 | |
Debt Disclosure [Abstract] | |
Borrowings and Capital Lease Obligations | Borrowings and Capital Lease Obligations Borrowings and capital lease obligations are summarized as follows (in thousands): Aug 1, 2015 Jan 31, 2015 European capital lease, maturing quarterly through May 2016 $ 4,840 $ 5,745 Other 2,057 1,968 6,897 7,713 Less current installments 4,840 1,548 Long-term debt and capital lease obligations $ 2,057 $ 6,165 Capital Lease The Company leases a building in Florence, Italy under a capital lease which provides for minimum lease payments through May 1, 2016 . As of August 1, 2015 , the capital lease obligation was $ 4.8 million . The Company entered into a separate interest rate swap agreement designated as a non-hedging instrument that resulted in a swap fixed rate of 3.55% . This interest rate swap agreement matures on February 1, 2016 and converts the nature of the capital lease obligation from Euribor floating-rate debt to fixed-rate debt. The fair value of the interest rate swap liability as of August 1, 2015 was approximately $ 0.2 million . Credit Facilities On June 23, 2015, the Company entered into a five -year senior secured asset-based revolving credit facility with Bank of America, N.A. and the other lenders party thereto (the “Credit Facility”). The Credit Facility provides for a borrowing capacity in an amount up to $ 150 million , including a Canadian sub-facility up to $ 50 million , subject to a borrowing base. Based on applicable accounts receivable, inventory and eligible cash balances as of August 1, 2015 , the Company could have borrowed up to $150 million under the Credit Facility. The Credit Facility has an option to expand the borrowing capacity by up to $ 150 million subject to certain terms and conditions, including the willingness of existing or new lenders to assume such increased amount. The Credit Facility is available for direct borrowings and the issuance of letters of credit, subject to certain letters of credit sublimits, and may be used for working capital and other general corporate purposes. The Credit Facility replaces the Company’s previous $ 300 million credit facility, which was scheduled to mature in July 2016 . No principal or interest was outstanding or accrued and unpaid under the prior credit facility on its termination date. All obligations under the Credit Facility are unconditionally guaranteed by the Company and the Company’s existing and future domestic and Canadian subsidiaries, subject to certain exceptions, and are secured by a first priority lien on substantially all of the assets of the Company and such domestic and Canadian subsidiaries , as applicable. Direct borrowings under the Credit Facility made by the Company and its domestic subsidiaries shall bear interest at the U.S. base rate plus an applicable margin (varying from 0.25% to 0.75% ) or at LIBOR plus an applicable margin (varying from 1.25% to 1.75% ). The U.S. base rate is based on the greater of (i) the U.S. prime rate, (ii) the federal funds rate, plus 0.5% , and (iii) LIBOR for a 30 day interest period, plus 1.0% . Direct borrowings under the Credit Facility made by the Company’s Canadian subsidiaries shall bear interest at the Canadian prime rate plus an applicable margin (varying from 0.25% to 0.75% ) or at the Canadian BA rate plus an applicable margin (varying from 1.25% to 1.75% ). The Canadian prime rate is based on the greater of (i) the Canadian prime rate, (ii) the Bank of Canada overnight rate, plus 0.5% , and (iii) the Canadian BA rate for a one month interest period, plus 1.0% . The applicable margins are calculated quarterly and vary based on the average daily availability of the aggregate borrowing base. The Company is also obligated to pay certain commitment, letter of credit and other fees customary for a credit facility of this size and type. As of August 1, 2015 , the Company had $ 1.7 million in outstanding standby letters of credit, no outstanding documentary letters of credit and no outstanding borrowings under the Credit Facility. The Credit Facility requires the Company to comply with a fixed charge coverage ratio on a trailing four-quarter basis if a default or an event of default occurs under the Credit Facility or if the borrowing capacity falls below certain levels. In addition, the Credit Facility contains customary covenants, including covenants that limit or restrict the Company and certain of its subsidiaries’ ability to: incur liens, incur indebtedness, make investments, dispose of assets, make certain restricted payments, merge or consolidate and enter into certain transactions with affiliates. Upon the occurrence of an event of default under the Credit Facility, the lenders may cease making loans, terminate the Credit Facility and declare all amounts outstanding to be immediately due and payable. The Credit Facility specifies a number of events of default (some of which are subject to applicable grace or cure periods), including, among other things, non-payment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults and material judgment defaults. The Credit Facility allows for both secured and unsecured borrowings outside of the Credit Facility up to specified amounts. The Company, through its European subsidiaries, maintains short-term uncommitted borrowing agreements, primarily for working capital purposes, with various banks in Europe. The majority of the borrowings under these agreements are secured by specific accounts receivable balances. Based on the applicable accounts receivable balances as of August 1, 2015 , the Company could have borrowed up to $ 80.8 million under these agreements. As of August 1, 2015 , the Company had no outstanding borrowings and $ 3.0 million in outstanding documentary letters of credit under these agreements. The agreements are denominated primarily in euros and provide for annual interest rates ranging from 0.9% to 6.8% . The maturities of any short-term borrowings under these arrangements are generally linked to the credit terms of the underlying accounts receivable that secure the borrowings. With the exception of one facility for up to $ 38.4 million that has a minimum net equity requirement, there are no other financial ratio covenants. Other From time-to-time, the Company will obtain other financing in foreign countries for working capital to finance its local operations. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Aug. 01, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation The following table summarizes the share-based compensation expense recognized under all of the Company’s stock plans during the three and six months ended August 1, 2015 and August 2, 2014 (in thousands): Three Months Ended Six Months Ended Aug 1, 2015 Aug 2, 2014 Aug 1, 2015 Aug 2, 2014 Stock options $ 439 $ 620 $ 920 $ 1,076 Stock awards/units 3,950 3,439 7,037 6,377 Employee Stock Purchase Plan 51 97 95 160 Total share-based compensation expense $ 4,440 $ 4,156 $ 8,052 $ 7,613 Unrecognized compensation cost, adjusted for estimated forfeitures, related to nonvested stock options and nonvested stock awards/units totaled approximately $ 5.1 million and $ 29.3 million , respectively, as of August 1, 2015 . This cost is expected to be recognized over a weighted average period of 1.7 years. The weighted average grant date fair value of options granted was $3.71 and $6.23 during the six months ended August 1, 2015 and August 2, 2014 , respectively. Grants On July 7, 2015, in connection with a new employment agreement entered into between the Company and Victor Herrero (the “Herrero Employment Agreement”), who became the Company’s Chief Executive Officer on August 1, 2015, the Company granted Mr. Herrero 600,000 stock options and 250,000 nonvested stock units. Mr. Herrero was also granted 150,000 restricted stock units which are considered contingently returnable as a result of certain service conditions set forth in the Herrero Employment Agreement. On April 2, 2015, the Company made an annual grant of 577,700 stock options and 401,700 nonvested stock awards/units to its employees. On April 2, 2014, the Company made an annual grant of 365,600 stock options and 301,200 nonvested stock awards/units to its employees. Performance-Based Awards As discussed above, on July 7, 2015, the Company granted certain nonvested stock units to Mr. Herrero in connection with the Herrero Employment Agreement. The nonvested stock units are scheduled to vest in increments of one-fourth of the shares granted on each anniversary from the date of grant, subject to the achievement of certain performance-based vesting conditions during the last two quarters of fiscal 2016 as well as continued service requirements through each of the vesting periods. The Company has granted certain nonvested stock units to Paul Marciano, the Company’s former Chief Executive Officer and current Executive Chairman of the Board and Chief Creative Officer, in connection with an employment agreement entered into between the Company and Mr. Marciano during fiscal 2014. Each award of nonvested stock units has an initial vesting period from the date of the grant through the end of the first fiscal year followed by two annual vesting periods. The nonvested stock units are subject to the achievement of certain performance-based vesting conditions during the first fiscal year of the grant as well as continued service requirements through each of the vesting periods. The Company has also granted a target number of nonvested stock units to Mr. Marciano in connection with his employment agreement. The number of shares that may ultimately vest with respect to each award will equal 0% to 150% of the target number of shares, subject to the achievement of certain performance-based vesting conditions during the first fiscal year of the grant as well as continued service requirements through the vesting date. Any shares that are ultimately issued are scheduled to vest at the end of the third fiscal year following the grant date. The following table summarizes the activity for nonvested performance-based awards during the six months ended August 1, 2015 : Number of Units Weighted Average Grant Date Fair Value Nonvested at January 31, 2015 413,834 $ 29.66 Granted 425,866 19.39 Vested (33,333 ) 27.86 Forfeited (159,700 ) 27.86 Nonvested at August 1, 2015 646,667 $ 23.44 Market-Based Awards On May 1, 2015, the Company also granted a target of 183,368 nonvested stock units to Mr. Marciano in connection with his employment agreement. The number of shares that may ultimately vest will equal 0% to 150% of the target number of shares, subject to the performance of the Company’s total stockholder return (“TSR”) relative to the TSR of a select group of peer companies over a three-year period. Vesting is also subject to continued service requirements through the vesting date. Any shares that are ultimately issued are scheduled to vest in fiscal 2019 . The grant date fair value for such nonvested stock units was estimated using a Monte Carlo simulation that incorporates option-pricing inputs covering the period from the grant date through the end of the performance period. Compensation expense is recognized on a straight-line basis over the vesting period. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Aug. 01, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company and its subsidiaries periodically enter into transactions with other entities or individuals that are considered related parties, including certain transactions with entities affiliated with trusts for the respective benefit of Paul Marciano, who is an executive of the Company, Maurice Marciano, Chairman Emeritus of the Board, Armand Marciano, their brother and former executive of the Company, and certain of their children (the “Marciano Trusts”). Leases The Company leases warehouse and administrative facilities, including the Company’s corporate headquarters in Los Angeles, California, from partnerships affiliated with the Marciano Trusts and certain of their affiliates. There were three of these leases in effect as of August 1, 2015 with expiration dates ranging from calendar years 2015 to 2020 . Aggregate rent, common area maintenance charges and property tax expense recorded under these related party leases for the six months ended August 1, 2015 and August 2, 2014 was $ 2.7 million and $ 3.0 million , respectively. The Company believes the related party lease terms have not been significantly affected by the fact that the Company and the lessors are related. Aircraft Arrangements The Company periodically charters aircraft owned by MPM Financial, LLC (“MPM Financial”), an entity affiliated with the Marciano Trusts, through informal arrangements with MPM Financial and independent third party management companies contracted by MPM Financial to manage its aircraft. The total fees paid under these arrangements for the six months ended August 1, 2015 and August 2, 2014 were approximately $ 0.3 million and $ 0.7 million , respectively. Consulting Arrangement After serving for over 30 years as an executive and leader for Guess?, Inc., co-founder Maurice Marciano retired from his position as executive Chairman of the Board and as an employee of the Company upon the expiration of his employment agreement on January 28, 2012. In connection with his retirement and under the terms of his previously existing employment agreement, the Company and Mr. Marciano entered into a two -year consulting agreement, subsequently extended for a third year (the “Marciano Consulting Agreement”), under which Mr. Marciano provided certain consulting services to the Company. The Marciano Consulting Agreement provided for consulting fees of $ 500,000 per year and continued automobile use in a manner consistent with past practice. The Marciano Consulting Agreement expired on January 28, 2015 and was not renewed. However, Mr. Marciano continues to serve the Company as a director and the Chairman Emeritus of the Board. The Company elected to continue to provide for automobile use subsequent to the expiration of the term of the Marciano Consulting Agreement based on Mr. Marciano’s continuing substantial contributions to the Company. There were no expenses incurred related to the Marciano Consulting Agreement during the six months ended August 1, 2015 . Total expenses incurred with respect to the Marciano Consulting Agreement were approximately $ 0.3 million for the six months ended August 2, 2014 . Other Transactions From time-to-time, the Company utilizes a third party agent named Harmony Collection, LLC to produce specific apparel products on behalf of the Company. Armand Marciano, brother of Maurice and Paul Marciano, is part owner and an executive of the parent company of Harmony Collection, LLC. There were no payments made by the Company under this arrangement for the six months ended August 1, 2015 . The total payments made by the Company under this arrangement for the six months ended August 2, 2014 were approximately $ 0.7 million . These related party disclosures should be read in conjunction with the disclosure concerning related party transactions in the Company’s Annual Report on Form 10-K for the year ended January 31, 2015 . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Aug. 01, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases The Company leases its showrooms, advertising, licensing, sales and merchandising offices, remote distribution and warehousing facilities and retail and factory outlet store locations under operating lease agreements expiring on various dates through September 2031 . Some of these leases require the Company to make periodic payments for property taxes, utilities and common area operating expenses. Certain retail store leases provide for rents based upon the minimum annual rental amount and a percentage of annual sales volume, generally ranging from 2% to 12% , when specific sales volumes are exceeded. Some leases include lease incentives, rent abatements and fixed rent escalations, which are amortized and recorded over the initial lease term on a straight-line basis. The Company also leases some of its equipment under operating lease agreements expiring at various dates through March 2020 . As discussed in further detail in Note 9, the Company leases a building in Florence, Italy under a capital lease which provides for minimum lease payments through May 1, 2016 . In March 2014, the Company amended its lease with respect to its primary U.S. distribution center based in Louisville, Kentucky to extend the term for an additional ten years, to 2024 . The amendment also provides for two extension options for an additional period of five years each. Litigation On May 6, 2009, Gucci America, Inc. filed a complaint in the U.S. District Court for the Southern District of New York against Guess?, Inc. and certain third party licensees for the Company asserting, among other things, trademark and trade dress law violations and unfair competition. The complaint sought injunctive relief, compensatory damages, including treble damages, and certain other relief. Complaints similar to those in the above action have also been filed by Gucci entities against the Company and certain of its subsidiaries in the Court of Milan, Italy, the Intermediate People’s Court of Nanjing, China and the Court of Paris, France. The three-week bench trial in the U.S. matter concluded on April 19, 2012, with the court issuing a preliminary ruling on May 21, 2012 and a final ruling on July 19, 2012. Although the plaintiff was seeking compensation in the U.S. matter in the form of damages of $ 26 million and an accounting of profits of $ 99 million , the final ruling provided for monetary damages of $ 2.3 million against the Company and $ 2.3 million against certain of its licensees. The court also granted narrow injunctions in favor of the plaintiff for certain of the claimed infringements. On August 20, 2012, the appeal period expired without any party having filed an appeal, rendering the judgment final. On May 2, 2013, the Court of Milan ruled in favor of the Company in the Milan, Italy matter. In the ruling, the Court rejected all of the plaintiff’s claims and ordered the cancellation of three of the plaintiff’s Italian and four of the plaintiff’s European Community trademark registrations. On June 10, 2013, the plaintiff appealed the Court’s ruling in the Milan matter. On September 15, 2014, the Court of Appeal of Milan affirmed the majority of the lower Court’s ruling in favor of the Company, but overturned the lower Court’s finding with respect to an unfair competition claim. The matter has now entered into a damages phase based on the ruling. In the China matter, the Intermediate People’s Court of Nanjing, China issued a ruling on November 8, 2013 granting an injunction in favor of the plaintiff for certain of the claimed infringements on handbags and small leather goods and awarding the plaintiff statutory damages in the amount of approximately $80,000 . The Company strongly disagrees with the Court’s decision and has appealed the ruling. The judgment in the China matter is stayed pending the appeal, which was heard in May 2014. On January 30, 2015, the Court of Paris ruled in favor of the Company, rejecting all of the plaintiff’s claims and partially canceling two of the plaintiff’s community trademark registrations and one of the plaintiff’s international trademark registrations. On February 17, 2015, the plaintiff appealed the Court of Paris’ ruling. On August 25, 2006, Franchez Isaguirre, a former employee of the Company, filed a complaint in the Superior Court of California, County of Los Angeles alleging violations by the Company of California wage and hour laws. The complaint was subsequently amended, adding a second former employee as an additional named party. The plaintiffs purport to represent a class of similarly situated employees in California who allegedly had been injured by not being provided adequate meal and rest breaks. The complaint seeks unspecified compensatory damages, statutory penalties, attorney’s fees and injunctive and declaratory relief. On June 9, 2009, the Court certified the class but immediately stayed the case pending the resolution of a separate California Supreme Court case on the standards of class treatment for meal and rest break claims. Following the Supreme Court ruling, the Superior Court denied the Company’s motions to decertify the class and to narrow the class in January 2013 and June 2013, respectively. The Company subsequently petitioned to have the Court’s decision not to narrow the class definition reviewed. That petition was ultimately denied by the California Supreme Court in April 2014. In July 2015, the parties entered into a Memorandum of Understanding to settle the matter for $5.25 million , subject to certain limited offsets. Once a formal settlement agreement is finalized by the parties, the settlement will be subject to the review and approval of the Court. The Company has received customs tax assessment notices from the Italian Customs Agency regarding its customs tax audit of one of the Company’s European subsidiaries for the period from July 2010 through December 2012 . Such assessments totaled € 9.8 million ($ 10.8 million ), including potential penalties and interest. The Company strongly disagrees with the positions that the Italian Customs Agency has taken and therefore filed appeals with the Milan First Degree Tax Court (“MFDTC”). On May 5, 2015, the MFDTC issued a judgment in favor of the Company in relation to the first set of appeals (covering the period through September 2010 ) and canceled the related assessments totaling € 1.7 million ($ 1.8 million ). While the ruling was favorable to the Company, there can be no assurances that the Company’s remaining appeals for October 2010 through December 2012 will be successful or that the Italian Customs Agency will not appeal the favorable MFDTC judgment. It also continues to be possible that the Company will receive similar or even larger assessments for periods subsequent to December 2012 or other claims or charges related to the matter in the future. Although the Company believes that it has a strong position and will continue to vigorously defend each of the remaining matters, it is unable to predict with certainty whether or not these efforts will ultimately be successful or whether the outcomes will have a material impact on the Company’s financial position or results of operations. The Company is also involved in various other claims and other matters incidental to the Company’s business, the resolutions of which are not expected to have a material adverse effect on the Company’s financial position or results of operations. |
Defined Benefit Plans
Defined Benefit Plans | 6 Months Ended |
Aug. 01, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Defined Benefit Plans | Defined Benefit Plans Supplemental Executive Retirement Plan On August 23, 2005, the Board of Directors of the Company adopted a Supplemental Executive Retirement Plan (“SERP”) which became effective January 1, 2006. The SERP provides select employees who satisfy certain eligibility requirements with certain benefits upon retirement, termination of employment, death, disability or a change in control of the Company, in certain prescribed circumstances. In July 2015, the SERP was amended in connection with Paul Marciano’s planned transition from Chief Executive Officer to Executive Chairman of the Board and Chief Creative Officer. The amendment effectively eliminated any future salary progression by finalizing compensation levels for future benefits. Mr. Marciano will continue to be eligible to receive SERP benefits in the future in accordance with the amended terms of the SERP. Subsequent to the amendment, there are no employees that would be considered actively participating under the terms of the SERP. As a result, during the three and six months ended August 1, 2015 , the Company included an actuarial gain of $11.4 million before taxes in accumulated other comprehensive income (loss). In addition, the Company also recognized a curtailment gain of $1.7 million before taxes related to the accelerated amortization of the remaining prior service credit during the three and six months ended August 1, 2015 . As a non-qualified pension plan, no dedicated funding of the SERP is required; however, the Company has made periodic payments into insurance policies held in a rabbi trust to fund the expected obligations arising under the non-qualified SERP. The amount of any future payments into the insurance policies, if any, may vary depending on investment performance of the trust. The cash surrender values of the insurance policies were $ 55.9 million and $ 53.6 million as of August 1, 2015 and January 31, 2015 , respectively, and were included in other assets in the Company’s condensed consolidated balance sheets. As a result of changes in the value of the insurance policy investments, the Company recorded unrealized gains (losses) of $ (0.3) million and $ 1.6 million in other income and expense during the three and six months ended August 1, 2015 , respectively, and unrealized gains of $ 0.7 million and $ 2.2 million in other income during the three and six months ended August 2, 2014 , respectively. During the six months ended August 1, 2015 , the Company also recorded realized gains of $0.7 million in other income resulting from payout on the insurance policies. The realized gains were recorded during the three months ended May 2, 2015. The projected benefit obligation was $50.6 million and $61.9 million as of August 1, 2015 and January 31, 2015 , respectively, and was included in accrued expenses and other long-term liabilities in the Company’s condensed consolidated balance sheets depending on the expected timing of payments. SERP benefit payments of $0.4 million and $0.8 million were made during the three and six months ended August 1, 2015 , respectively. SERP benefit payments of $0.3 million were made during the three and six months ended August 2, 2014 . The components of net periodic defined benefit pension (credit) cost for the three and six months ended August 1, 2015 and August 2, 2014 related to the SERP are as follows (in thousands): Three Months Ended Six Months Ended Aug 1, 2015 Aug 2, 2014 Aug 1, 2015 Aug 2, 2014 Interest cost $ 495 $ 572 $ 991 $ 1,144 Net amortization of unrecognized prior service credit (39 ) (58 ) (97 ) (116 ) Net amortization of actuarial losses 290 235 718 469 Curtailment gain (1,651 ) — (1,651 ) — Net periodic defined benefit pension (credit) cost $ (905 ) $ 749 $ (39 ) $ 1,497 Swiss Pension Plan In accordance with local regulations, the Company also maintains a pension plan in Switzerland for certain of its employees. The plan is a government-mandated defined contribution plan that provides employees with a minimum investment return determined annually by the Swiss government, and as such, is treated under pension accounting in accordance with authoritative guidance. Under the plan, both the Company and certain of its employees with annual earnings in excess of government determined amounts are required to make contributions into a fund managed by an independent investment fiduciary. The Company’s contributions must be made in an amount at least equal to the employee’s contribution. Minimum employee contributions are based on the respective employee’s age, salary and gender. As of August 1, 2015 and January 31, 2015 , the plan had a projected benefit obligation of CHF 14.5 million (US$ 15.0 million ) and CHF 13.9 million (US$ 15.1 million ), respectively, and plan assets held at the independent investment fiduciary of CHF 12.1 million (US$ 12.5 million ) and CHF 11.5 million (US$ 12.5 million ), respectively. The net liability of CHF 2.4 million (US$ 2.5 million ) and CHF 2.4 million (US$ 2.6 million ) was included in other long-term liabilities in the Company’s condensed consolidated balance sheets as of August 1, 2015 and January 31, 2015 , respectively. During the three and six months ended August 1, 2015 , the Company recognized net periodic defined benefit pension cost of CHF 0.4 million (US$ 0.5 million ) and CHF 0.9 million (US $0.9 million ), respectively, resulting from service cost and net amortization of actuarial losses related to the Swiss pension plan. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Aug. 01, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Authoritative guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that can be accessed at the measurement date. Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e. interest rates, yield curves, etc.) and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3—Unobservable inputs that reflect assumptions about what market participants would use in pricing the asset or liability. These inputs would be based on the best information available, including the Company’s own data. The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of August 1, 2015 and January 31, 2015 (in thousands): Fair Value Measurements at Aug 1, 2015 Fair Value Measurements at Jan 31, 2015 Recurring Fair Value Measures Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Foreign exchange currency contracts $ — $ 8,446 $ — $ 8,446 $ — $ 15,542 $ — $ 15,542 Available-for-sale securities 23 — — 23 36 — — 36 Total $ 23 $ 8,446 $ — $ 8,469 $ 36 $ 15,542 $ — $ 15,578 Liabilities: Foreign exchange currency contracts $ — $ 207 $ — $ 207 $ — $ — $ — $ — Interest rate swap — 165 — 165 — 270 — 270 Deferred compensation obligations — 11,213 — 11,213 — 9,133 — 9,133 Total $ — $ 11,585 $ — $ 11,585 $ — $ 9,403 $ — $ 9,403 There were no transfers of financial instruments between the three levels of fair value hierarchy during the six months ended August 1, 2015 or during the year ended January 31, 2015 . The fair values of the Company ’ s available-for-sale securities are based on quoted prices. The fair value of the interest rate swaps are based upon inputs corroborated by observable market data. Foreign exchange forward contracts are entered into by the Company principally to hedge the future payment of inventory and intercompany transactions by non-U.S. subsidiaries. Periodically, the Company may also use foreign currency forward contracts to hedge the translation and economic exposures related to its net investments in certain of its international subsidiaries. The fair values of the Company ’ s foreign exchange forward contracts are based on quoted foreign exchange forward rates at the reporting date. Deferred compensation obligations to employees are adjusted based on changes in the fair value of the underlying employee-directed investments. Fair value of these obligations is based upon inputs corroborated by observable market data. Available-for-sale securities, which consist of marketable equity securities, are recorded at fair value and are included in other assets in the accompanying condensed consolidated balance sheets. As of August 1, 2015 and January 31, 2015 , available-for-sale securities were minimal. Unrealized gains (losses), net of taxes, are included as a component of stockholders ’ equity and comprehensive income (loss). As of August 1, 2015 and January 31, 2015 , the accumulated unrealized losses , net of taxes, included in accumulated other comprehensive income (loss) related to available-for-sale securities owned by the Company were minimal. During the six months ended August 2, 2014 , the Company received proceeds of $0.6 million from the sale of marketable equity securities which were classified as available-for-sale securities. The sale of marketable equity securities was made during the three months ended May 3, 2014. The cost of securities sold was based on the specific identification method. Gains recognized during the six months ended August 2, 2014 were $0.1 million as a result of this sale and were included in other income. The carrying amount of the Company ’ s remaining financial instruments, which principally include cash and cash equivalents, trade receivables, accounts payable and accrued expenses, approximates fair value due to the relatively short maturity of such instruments. The fair values of the Company ’ s debt instruments (see Note 9) are based on the amount of future cash flows associated with each instrument discounted using the Company ’ s incremental borrowing rate. As of August 1, 2015 and January 31, 2015 , the carrying value of all financial instruments was not materially different from fair value, as the interest rates on variable-rate debt including the capital lease obligation approximated rates currently available to the Company. Long-Lived Assets Long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment quarterly or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company considers each individual store or concession as an asset group for impairment testing, which is the lowest level at which individual cash flows can be identified. The asset group includes leasehold improvements, furniture, fixtures and equipment, computer hardware and software and certain long-term security deposits and lease acquisition costs. The Company reviews retail locations in penetrated markets for impairment risk once the locations have been opened for at least one year in their current condition, or sooner as changes in circumstances require. The Company believes that waiting one year allows a store or concession to reach a maturity level where a more comprehensive analysis of financial performance can be performed. The Company evaluates impairment risk for retail locations in new markets, where the Company is in the early stages of establishing its presence, once the locations have been opened for at least two years. The Company believes that waiting two years allows for brand awareness to be established. The Company also evaluates impairment risk for retail locations that are expected to be closed in the foreseeable future. An asset is considered to be impaired if the Company determines that the carrying value may not be recoverable based upon its assessment of the asset ’ s ability to continue to generate earnings from operations and positive cash flow in future periods or if significant changes in the Company ’ s strategic business objectives and utilization of the assets occurred. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the estimated fair value, which is determined based on discounted future cash flows. The impairment loss calculations require management to apply judgment in estimating future cash flows and the discount rates that reflect the risk inherent in future cash flows. Future expected cash flows for store and concession assets are based on management ’ s estimates of future cash flows over the remaining lease period or expected life, if shorter. For expected store and concession closures, the Company will evaluate whether it is necessary to shorten the useful life for any of the assets within the respective asset group. The Company will use this revised useful life when estimating the asset group’s future cash flows. The Company considers historical trends, expected future business trends and other factors when estimating the future cash flow for each retail location. The Company also considers factors such as: the local environment for each retail location, including mall traffic and competition; the Company ’ s ability to successfully implement strategic initiatives; and the ability to control variable costs such as cost of sales and payroll and, in some cases, renegotiate lease costs. The estimated cash flows used for this nonrecurring fair value measurement are considered a Level 3 input as defined above. If actual results are not consistent with the assumptions and judgments used in estimating future cash flows and asset fair values, there may be additional exposure to future impairment losses that could be material to the Company ’ s results of operations. The Company recorded impairment charges of $0.7 million and $ 1.8 million during the three and six months ended August 1, 2015 , respectively, and $4.6 million and $ 4.8 million during the three and six months ended August 2, 2014 , respectively. The impairment charges related primarily to the impairment of certain retail stores in North America and Europe resulting from under-performance or the exercise of kick-out options during each of the respective periods. These impairment charges were included in selling, general and administrative expenses in the Company’s condensed consolidated statements of income for each of the respective periods. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Aug. 01, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Hedging Strategy The Company operates in foreign countries, which exposes it to market risk associated with foreign currency exchange rate fluctuations. The Company has entered into certain forward contracts to hedge the risk of foreign currency rate fluctuations. The Company has elected to apply the hedge accounting rules in accordance with authoritative guidance for certain of these hedges. The Company’s primary objective is to hedge the variability in forecasted cash flows due to the foreign currency risk. Various transactions that occur primarily in Europe, Canada, South Korea and Mexico are denominated in U.S. dollars and British pounds and thus are exposed to earnings risk as a result of exchange rate fluctuations when converted to their functional currencies. These types of transactions include U.S. dollar denominated purchases of merchandise and U.S. dollar and British pound denominated intercompany liabilities. In addition, certain operating expenses, tax liabilities and pension-related liabilities are denominated in Swiss francs and are exposed to earnings risk as a result of exchange rate fluctuations when converted to the functional currency. The Company enters into derivative financial instruments , including forward exchange contracts, to offset some but not all of the exchange risk on certain of these anticipated foreign currency transactions . Periodically, the Company may also use foreign currency forward contracts to hedge the translation and economic exposures related to its net investments in certain of its international subsidiaries. The impact of the credit risk of the counterparties to the derivative contracts is considered in determining the fair value of the foreign currency forward contracts. As of August 1, 2015 , credit risk has not had a significant effect on the fair value of the Company’s foreign currency contracts. The Company also has interest rate swap agreements, which are not designated as hedges for accounting purposes, to effectively convert its floating-rate debt to a fixed-rate basis. The principal objective of these contracts is to eliminate or reduce the variability of the cash flows in interest payments associated with the Company’s variable-rate capital lease obligation, thus reducing the impact of interest rate changes on future interest payment cash flows. Refer to Note 9 for further information. Hedge Accounting Policy U.S. dollar forward contracts are used to hedge forecasted merchandise purchases over specific months. Changes in the fair value of these U.S. dollar forward contracts, designated as cash flow hedges, are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are recognized in cost of product sales in the period which approximates the time the hedged merchandise inventory is sold . The Company also hedges forecasted intercompany royalties over specific months. Changes in the fair value of these U.S. dollar forward contracts, designated as cash flow hedges, are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are recognized in other income and expense in the period in which the royalty expense is incurred. The Company has also used U.S. dollar forward contracts to hedge the net investments of certain of the Company’s international subsidiaries over specific months. Changes in the fair value of these U.S. dollar forward contracts, designated as net investment hedges, are recorded in foreign currency translation adjustment as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are not recognized in earnings until the sale or liquidation of the hedged net investment. The Company also has foreign currency contracts that are not designated as hedging instruments for accounting purposes. Changes in fair value of foreign currency contracts not designated as hedging instruments are reported in net earnings as part of other income and expense. Summary of Derivative Instruments The fair value of derivative instruments in the condensed consolidated balance sheets as of August 1, 2015 and January 31, 2015 is as follows (in thousands): Derivative Balance Sheet Location Fair Value at Fair Value at ASSETS: Derivatives designated as hedging instruments: Foreign exchange currency contracts: Cash flow hedges Other current assets/ Other assets $ 4,454 $ 6,597 Derivatives not designated as hedging instruments: Foreign exchange currency contracts Other current assets 3,992 8,945 Total $ 8,446 $ 15,542 LIABILITIES: Derivatives designated as hedging instruments: Foreign exchange currency contracts: Cash flow hedges Accrued expenses $ 76 $ — Derivatives not designated as hedging instruments: Foreign exchange currency contracts Accrued expenses 131 — Interest rate swaps Accrued expenses/ Other long-term liabilities 165 270 Total derivatives not designated as hedging instruments 296 270 Total $ 372 $ 270 Derivatives Designated as Hedging Instruments Cash Flow Hedges During the six months ended August 1, 2015 , the Company purchased U.S. dollar forward contracts in Europe and Canada totaling US $82.2 million and US $43.8 million , respectively, to hedge forecasted merchandise purchases and intercompany royalties that were designated as cash flow hedges. As of August 1, 2015 , the Company had forward contracts outstanding for its European and Canadian operations of US$ 92.9 million and US$ 43.8 million , respectively, which are expected to mature over the next 18 months . The following table summarizes the gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings for the three and six months ended August 1, 2015 and August 2, 2014 (in thousands): Gain Recognized in OCI Location of Gain (Loss) Reclassified from Accumulated OCI into Earnings(1) Gain (Loss) Reclassified from Accumulated OCI into Earnings Three Months Ended Three Months Ended Aug 1, 2015 Aug 2, 2014 Aug 1, 2015 Aug 2, 2014 Derivatives designated as cash flow hedges: Foreign exchange currency contracts $ 5,343 $ 1,866 Cost of product sales $ 3,193 $ (265 ) Foreign exchange currency contracts $ 378 $ 1 Other income/expense $ 330 $ (25 ) Gain (Loss) Recognized in OCI Location of Gain (Loss) Reclassified from Accumulated OCI into Earnings(1) Gain (Loss) Reclassified from Accumulated OCI into Earnings Six Months Ended Six Months Ended Aug 1, 2015 Aug 2, 2014 Aug 1, 2015 Aug 2, 2014 Derivatives designated as cash flow hedges: Foreign exchange currency contracts $ 4,196 $ (706 ) Cost of product sales $ 4,943 $ (759 ) Foreign exchange currency contracts $ 230 $ (106 ) Other income/expense $ 816 $ (56 ) __________________________________ (1) The ineffective portion was immaterial during the three and six months ended August 1, 2015 and August 2, 2014 and was recorded in net earnings and included in interest income/expense. As of August 1, 2015 , accumulated other comprehensive income (loss) included a net unrealized gain of approximately $ 5.9 million , net of tax, of which $ 4.6 million will be recognized in cost of product sales or other income over the following 12 months, at the then current values on a pre-tax basis, which can be different than the current quarter-end values. The following table summarizes net after-tax derivative activity recorded in accumulated other comprehensive income (loss) (in thousands): Three Months Ended Six Months Ended Aug 1, 2015 Aug 2, 2014 Aug 1, 2015 Aug 2, 2014 Beginning balance gain (loss) $ 4,296 $ (1,667 ) $ 7,157 $ (113 ) Net gains (losses) from changes in cash flow hedges 4,584 1,352 3,658 (706 ) Net (gains) losses reclassified to earnings (3,012 ) 681 (4,947 ) 1,185 Ending balance gain $ 5,868 $ 366 $ 5,868 $ 366 At January 31, 2015 , the Company had forward contracts outstanding for its European and Canadian operations of US$ 50.8 million and US$ 24.5 million , respectively, that were designated as cash flow hedges. Derivatives Not Designated as Hedging Instruments As of August 1, 2015 , the Company had euro foreign currency contracts to purchase US$ 81.9 million expected to mature over the next 12 months and Canadian dollar foreign currency contracts to purchase US $14.3 million expected to mature over the next seven months . The following table summarizes the gains before taxes recognized on the derivative instruments not designated as hedging instruments in other income for the three and six months ended August 1, 2015 and August 2, 2014 (in thousands): Location of Gain Recognized in Earnings Gain Recognized in Earnings Gain Recognized in Earnings Three Months Ended Six Months Ended Aug 1, 2015 Aug 2, 2014 Aug 1, 2015 Aug 2, 2014 Derivatives not designated as hedging instruments: Foreign exchange currency contracts Other income/expense $ 2,860 $ 3,984 $ 2,159 $ 1,195 Interest rate swaps Other income/expense $ 47 $ 57 $ 96 $ 132 At January 31, 2015 , the Company had euro foreign currency contracts to purchase US$ 59.3 million and Canadian dollar foreign currency contracts to purchase US$ 19.9 million . |
Subsequent Events
Subsequent Events | 6 Months Ended |
Aug. 01, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On August 26, 2015 , the Company announced a regular quarterly cash dividend of $0.225 per share on the Company’s common stock. The cash dividend will be paid on September 25, 2015 to shareholders of record as of the close of business on September 9, 2015 . |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Aug. 01, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of Guess?, Inc., its wholly-owned direct and indirect subsidiaries and its non wholly-owned subsidiaries and joint ventures in which the Company has a controlling financial interest and is determined to be the primary beneficiary. Accordingly, all references herein to “Guess?, Inc.” include the consolidated results of the Company, its wholly-owned subsidiaries and its joint ventures. All intercompany accounts and transactions are eliminated during the consolidation process. |
Reclassifications | Reclassifications The Company has made certain reclassifications to prior year amounts to conform to the current period presentation within the accompanying notes to the condensed consolidated financial statements. |
New Accounting Guidance | New Accounting Guidance In April 2014, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance which raises the threshold for disposals to qualify as discontinued operations. Under this new guidance, a discontinued operation is (1) a component of an entity or group of components that have been disposed of or are classified as held for sale and represent a strategic shift that has or will have a major effect on an entity’s operations and financial results, or (2) an acquired business that is classified as held for sale on the acquisition date. This guidance also requires expanded or new disclosures for discontinued operations, individually material disposals that do not meet the definition of a discontinued operation, an entity’s continuing involvement with a discontinued operation following disposal and retained equity method investments in a discontinued operation. The Company adopted this guidance effective February 1, 2015. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements for the three and six months ended August 1, 2015 . In May 2014, the FASB issued a comprehensive new revenue recognition standard which will supersede previous existing revenue recognition guidance. The standard creates a five-step model for revenue recognition that requires companies to exercise judgment when considering contract terms and relevant facts and circumstances. The five-step model includes (1) identifying the contract, (2) identifying the separate performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations and (5) recognizing revenue when each performance obligation has been satisfied. The standard also requires expanded disclosures surrounding revenue recognition. The standard is effective for fiscal periods beginning after December 15, 2017, which will be the Company’s first quarter of fiscal 2019, and allows for either full retrospective or modified retrospective adoption. Early adoption is permitted for fiscal periods beginning after December 15, 2016, which will be the Company’s first quarter of fiscal 2018. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements, including the choice of application method upon adoption. In August 2014, the FASB issued authoritative guidance that requires an entity’s management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern and requires additional disclosures if certain criteria are met. This guidance is effective for fiscal periods ending after December 15, 2016, which will be the Company’s fourth quarter of fiscal 2017, with early adoption permitted. The adoption of this guidance is not expected to impact the Company’s consolidated financial statements or related disclosures. In February 2015, the FASB issued authoritative guidance which modifies existing consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. This guidance is effective for fiscal periods beginning after December 15, 2015, which will be the Company’s first quarter of fiscal 2017, and allows for either full retrospective or modified retrospective adoption, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements, including the choice of application method upon adoption. In April 2015, the FASB issued authoritative guidance to simplify the presentation of debt issuance costs by requiring such costs to be presented as a deduction from the corresponding debt liability. This guidance is effective for fiscal years beginning after December 15, 2015, which will be the Company’s first quarter of fiscal 2017, and requires retrospective adoption, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures. In April 2015, the FASB issued authoritative guidance which would permit an entity to measure its defined benefit plan assets and obligations using the calendar month-end that is closest to the entity’s fiscal period-end for interim and annual periods. This guidance is effective for fiscal years beginning after December 15, 2015, which will be the Company’s first quarter of fiscal 2017, and requires prospective adoption, with early adoption permitted. The Company is currently evaluating whether it will adopt this guidance, but if adopted, this guidance is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures. In July 2015, the FASB issued authoritative guidance to simplify the subsequent measurement of inventories by replacing the lower of cost or market test with a lower of cost and net realizable value test. This guidance is effective for fiscal years beginning after December 15, 2016, which will be the Company’s first quarter of fiscal 2018, and requires prospective adoption, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Aug. 01, 2015 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted net earnings per common share attributable to common stockholders | The computation of basic and diluted net earnings per common share attributable to common stockholders is as follows (in thousands, except per share data): Three Months Ended Six Months Ended Aug 1, 2015 Aug 2, 2014 Aug 1, 2015 Aug 2, 2014 Net earnings attributable to Guess?, Inc. $ 18,289 $ 21,954 $ 21,630 $ 19,853 Less net earnings attributable to nonvested restricted stockholders 143 167 227 292 Net earnings attributable to common stockholders $ 18,146 $ 21,787 $ 21,403 $ 19,561 Weighted average common shares used in basic computations 85,004 84,573 84,985 84,536 Effect of dilutive securities: Stock options and restricted stock units 286 226 147 229 Weighted average common shares used in diluted computations 85,290 84,799 85,132 84,765 Net earnings per common share attributable to common stockholders: Basic $ 0.21 $ 0.26 $ 0.25 $ 0.23 Diluted $ 0.21 $ 0.26 $ 0.25 $ 0.23 |
Stockholders' Equity and Rede25
Stockholders' Equity and Redeemable Noncontrolling Interests (Tables) | 6 Months Ended |
Aug. 01, 2015 | |
Stockholders' Equity and Redeemable Noncontrolling Interests [Abstract] | |
Reconciliation of common stock outstanding, treasury stock and the total carrying amount of total stockholders' equity, Guess, Inc. stockholders' equity and stockholders' equity attributable to nonredeemable and redeemable noncontrolling interests | A reconciliation of common stock outstanding, treasury stock and the total carrying amount of total stockholders’ equity, Guess?, Inc. stockholders’ equity and stockholders’ equity attributable to nonredeemable and redeemable noncontrolling interests for the fiscal year ended January 31, 2015 and six months ended August 1, 2015 is as follows (in thousands, except share data): Shares Stockholders’ Equity Common Stock Treasury Stock Guess?, Inc. Stockholders’ Equity Nonredeemable Noncontrolling Interests Total Redeemable Noncontrolling Interests Balance at February 1, 2014 84,962,345 54,283,384 $ 1,154,514 $ 15,472 $ 1,169,986 $ 5,830 Net earnings — — 94,570 2,614 97,184 — Foreign currency translation adjustment — — (114,566 ) (2,141 ) (116,707 ) (788 ) Gain on derivative financial instruments designated as cash flow hedges, net of income tax of ($721) — — 7,270 — 7,270 — Loss on marketable securities, net of income tax of $61 — — (106 ) — (106 ) — Prior service credit amortization and actuarial valuation loss and related amortization on defined benefit plans, net of income tax of $2,335 — — (5,862 ) — (5,862 ) — Issuance of common stock under stock compensation plans, net of tax effect 313,271 — (1,937 ) — (1,937 ) — Issuance of stock under Employee Stock Purchase Plan 47,538 (47,538 ) 1,008 — 1,008 — Share-based compensation — — 15,342 — 15,342 — Dividends — — (76,982 ) — (76,982 ) — Noncontrolling interest capital distribution — — — (355 ) (355 ) — Redeemable noncontrolling interest redemption value adjustment — — 605 — 605 (605 ) Balance at January 31, 2015 85,323,154 54,235,846 $ 1,073,856 $ 15,590 $ 1,089,446 $ 4,437 Net earnings — — 21,630 836 22,466 — Foreign currency translation adjustment — — (21,036 ) (600 ) (21,636 ) (308 ) Loss on derivative financial instruments designated as cash flow hedges, net of income tax of $44 — — (1,289 ) — (1,289 ) — Loss on marketable securities, net of income tax of $6 — — (8 ) — (8 ) — Actuarial valuation gain (loss) and related amortization, curtailment and prior service credit amortization on defined benefit plans, net of income tax of ($3,979) — — 6,594 — 6,594 — Issuance of common stock under stock compensation plans, net of tax effect 416,804 — (1,842 ) — (1,842 ) — Issuance of stock under Employee Stock Purchase Plan 23,482 (23,482 ) 374 — 374 — Share-based compensation — — 8,052 — 8,052 — Dividends — — (38,658 ) — (38,658 ) — Noncontrolling interest capital distribution — — — (3,830 ) (3,830 ) — Redeemable noncontrolling interest redemption value adjustment — — (1,220 ) — (1,220 ) 1,220 Balance at August 1, 2015 85,763,440 54,212,364 $ 1,046,453 $ 11,996 $ 1,058,449 $ 5,349 |
Schedule of changes in accumulated other comprehensive income (loss), net of related income taxes | The changes in accumulated other comprehensive income (loss), net of related income taxes, for the three and six months ended August 1, 2015 and August 2, 2014 are as follows (in thousands): Three Months Ended Aug 1, 2015 Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Marketable Securities Defined Benefit Plans Total Balance at May 2, 2015 $ (121,908 ) $ 4,296 $ (7 ) $ (12,344 ) $ (129,963 ) Gains (losses) arising during the period (20,697 ) 4,584 (4 ) 7,026 (9,091 ) Reclassification to net earnings for gains realized — (3,012 ) — (738 ) (3,750 ) Net other comprehensive income (loss) (20,697 ) 1,572 (4 ) 6,288 (12,841 ) Balance at August 1, 2015 $ (142,605 ) $ 5,868 $ (11 ) $ (6,056 ) $ (142,804 ) Six Months Ended Aug 1, 2015 Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Marketable Securities Defined Benefit Plans Total Balance at January 31, 2015 $ (121,569 ) $ 7,157 $ (3 ) $ (12,650 ) $ (127,065 ) Gains (losses) arising during the period (21,036 ) 3,658 (8 ) 7,026 (10,360 ) Reclassification to net earnings for gains realized — (4,947 ) — (432 ) (5,379 ) Net other comprehensive income (loss) (21,036 ) (1,289 ) (8 ) 6,594 (15,739 ) Balance at August 1, 2015 $ (142,605 ) $ 5,868 $ (11 ) $ (6,056 ) $ (142,804 ) Three Months Ended Aug 2, 2014 Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Marketable Securities Defined Benefit Plans Total Balance at May 3, 2014 $ 14,846 $ (1,667 ) $ 33 $ (6,679 ) $ 6,533 Gains (losses) arising during the period (19,424 ) 1,352 (25 ) — (18,097 ) Reclassification to net earnings for losses realized — 681 — 109 790 Net other comprehensive income (loss) (19,424 ) 2,033 (25 ) 109 (17,307 ) Balance at August 2, 2014 $ (4,578 ) $ 366 $ 8 $ (6,570 ) $ (10,774 ) Six Months Ended Aug 2, 2014 Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Marketable Securities Defined Benefit Plans Total Balance at February 1, 2014 $ (7,003 ) $ (113 ) $ 103 $ (6,788 ) $ (13,801 ) Gains (losses) arising during the period 2,425 (706 ) (41 ) — 1,678 Reclassification to net earnings for (gains) losses realized — 1,185 (54 ) 218 1,349 Net other comprehensive income (loss) 2,425 479 (95 ) 218 3,027 Balance at August 2, 2014 $ (4,578 ) $ 366 $ 8 $ (6,570 ) $ (10,774 ) |
Reclassifications out of accumulated other comprehensive income (loss) to net earnings | Details on reclassifications out of accumulated other comprehensive income (loss) to net earnings during the three and six months ended August 1, 2015 and August 2, 2014 are as follows (in thousands): Three Months Ended Six Months Ended Location of (Gain) Loss Reclassified from Accumulated OCI into Earnings Aug 1, 2015 Aug 2, 2014 Aug 1, 2015 Aug 2, 2014 Derivative financial instruments designated as cash flow hedges: Foreign exchange currency contracts $ (3,193 ) $ 265 $ (4,943 ) $ 759 Cost of product sales Foreign exchange currency contracts (330 ) 25 (816 ) 56 Other income/expense Less income tax effect 511 391 812 370 Income tax expense (3,012 ) 681 (4,947 ) 1,185 Marketable securities: Available-for-sale securities — — — (87 ) Other income/expense Less income tax effect — — — 33 Income tax expense — — — (54 ) Defined benefit plans: Actuarial loss amortization 430 235 943 469 (1) Prior service credit amortization (39 ) (58 ) (97 ) (116 ) (1) Curtailment (1,651 ) — (1,651 ) — (1) Less income tax effect 522 (68 ) 373 (135 ) Income tax expense (738 ) 109 (432 ) 218 Total reclassifications during the period $ (3,750 ) $ 790 $ (5,379 ) $ 1,349 __________________________________ (1) These accumulated other comprehensive income (loss) components are included in the computation of net periodic defined benefit pension cost. Refer to Note 13 for further information. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Aug. 01, 2015 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Accounts receivable is summarized as follows (in thousands): Aug 1, 2015 Jan 31, 2015 Trade $ 208,976 $ 229,618 Royalty 10,830 10,118 Other 8,404 8,389 228,210 248,125 Less allowance for doubtful accounts 29,475 31,920 $ 198,735 $ 216,205 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Aug. 01, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consist of the following (in thousands): Aug 1, 2015 Jan 31, 2015 Raw materials $ 3,409 $ 4,548 Work in progress 59 77 Finished goods 331,992 314,453 $ 335,460 $ 319,078 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 6 Months Ended |
Aug. 01, 2015 | |
Restructuring Charges [Abstract] | |
Summary of restructuring activities related primarily to severance | The following table summarizes restructuring activities related primarily to severance during the fiscal year ended January 31, 2015 and six months ended August 1, 2015 (in thousands): Total Balance at February 1, 2014 $ 4,578 Cash payments (2,952 ) Foreign currency and other adjustments (1,350 ) Balance at January 31, 2015 $ 276 Cash payments (39 ) Foreign currency and other adjustments (56 ) Balance at August 1, 2015 $ 181 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Aug. 01, 2015 | |
Segment Reporting [Abstract] | |
Summary of net revenue and earnings (loss) from operations by segment | Net revenue and earnings (loss) from operations are summarized as follows for the three and six months ended August 1, 2015 and August 2, 2014 (in thousands): Three Months Ended Six Months Ended Aug 1, 2015 Aug 2, 2014 Aug 1, 2015 Aug 2, 2014 Net revenue: Americas Retail(1) $ 232,456 $ 244,000 $ 446,705 $ 472,344 Europe 199,375 235,260 336,772 394,418 Asia 56,745 64,267 120,780 134,385 Americas Wholesale(1) 32,361 38,252 69,639 77,560 Licensing 25,327 26,792 51,192 52,405 Total net revenue $ 546,264 $ 608,571 $ 1,025,088 $ 1,131,112 Earnings (loss) from operations: Americas Retail(1) $ 5,244 $ (4,662 ) $ (1,965 ) $ (13,061 ) Europe 18,186 24,513 14,518 17,881 Asia 887 2,264 5,500 5,617 Americas Wholesale(1) 4,872 5,167 11,619 12,920 Licensing 22,415 24,909 45,440 47,630 Corporate Overhead (25,403 ) (22,333 ) (44,558 ) (43,106 ) Total earnings from operations $ 26,201 $ 29,858 $ 30,554 $ 27,881 __________________________________ (1) Beginning in the second quarter of fiscal 2016, the Company changed the names of its “North American Retail” and “North American Wholesale” segments to “Americas Retail” and “Americas Wholesale” to better reflect that these segments are inclusive of its operations in North America as well as Central and South America. There have been no changes to the underlying reporting in either segment. |
Borrowings and Capital Lease 30
Borrowings and Capital Lease Obligations (Tables) | 6 Months Ended |
Aug. 01, 2015 | |
Debt Disclosure [Abstract] | |
Summary of borrowings and capital lease obligations | Borrowings and capital lease obligations are summarized as follows (in thousands): Aug 1, 2015 Jan 31, 2015 European capital lease, maturing quarterly through May 2016 $ 4,840 $ 5,745 Other 2,057 1,968 6,897 7,713 Less current installments 4,840 1,548 Long-term debt and capital lease obligations $ 2,057 $ 6,165 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Aug. 01, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of share-based compensation expense recognized under all of the Company's stock plans | The following table summarizes the share-based compensation expense recognized under all of the Company’s stock plans during the three and six months ended August 1, 2015 and August 2, 2014 (in thousands): Three Months Ended Six Months Ended Aug 1, 2015 Aug 2, 2014 Aug 1, 2015 Aug 2, 2014 Stock options $ 439 $ 620 $ 920 $ 1,076 Stock awards/units 3,950 3,439 7,037 6,377 Employee Stock Purchase Plan 51 97 95 160 Total share-based compensation expense $ 4,440 $ 4,156 $ 8,052 $ 7,613 |
Schedule of activity for nonvested performance-based awards | The following table summarizes the activity for nonvested performance-based awards during the six months ended August 1, 2015 : Number of Units Weighted Average Grant Date Fair Value Nonvested at January 31, 2015 413,834 $ 29.66 Granted 425,866 19.39 Vested (33,333 ) 27.86 Forfeited (159,700 ) 27.86 Nonvested at August 1, 2015 646,667 $ 23.44 |
Defined Benefit Plans (Tables)
Defined Benefit Plans (Tables) | 6 Months Ended |
Aug. 01, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Components of net periodic defined benefit pension (credit) cost | The components of net periodic defined benefit pension (credit) cost for the three and six months ended August 1, 2015 and August 2, 2014 related to the SERP are as follows (in thousands): Three Months Ended Six Months Ended Aug 1, 2015 Aug 2, 2014 Aug 1, 2015 Aug 2, 2014 Interest cost $ 495 $ 572 $ 991 $ 1,144 Net amortization of unrecognized prior service credit (39 ) (58 ) (97 ) (116 ) Net amortization of actuarial losses 290 235 718 469 Curtailment gain (1,651 ) — (1,651 ) — Net periodic defined benefit pension (credit) cost $ (905 ) $ 749 $ (39 ) $ 1,497 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Aug. 01, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of August 1, 2015 and January 31, 2015 (in thousands): Fair Value Measurements at Aug 1, 2015 Fair Value Measurements at Jan 31, 2015 Recurring Fair Value Measures Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Foreign exchange currency contracts $ — $ 8,446 $ — $ 8,446 $ — $ 15,542 $ — $ 15,542 Available-for-sale securities 23 — — 23 36 — — 36 Total $ 23 $ 8,446 $ — $ 8,469 $ 36 $ 15,542 $ — $ 15,578 Liabilities: Foreign exchange currency contracts $ — $ 207 $ — $ 207 $ — $ — $ — $ — Interest rate swap — 165 — 165 — 270 — 270 Deferred compensation obligations — 11,213 — 11,213 — 9,133 — 9,133 Total $ — $ 11,585 $ — $ 11,585 $ — $ 9,403 $ — $ 9,403 |
Derivative Financial Instrume34
Derivative Financial Instruments (Tables) | 6 Months Ended |
Aug. 01, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of fair value of derivative instruments in the condensed consolidated balance sheets | The fair value of derivative instruments in the condensed consolidated balance sheets as of August 1, 2015 and January 31, 2015 is as follows (in thousands): Derivative Balance Sheet Location Fair Value at Fair Value at ASSETS: Derivatives designated as hedging instruments: Foreign exchange currency contracts: Cash flow hedges Other current assets/ Other assets $ 4,454 $ 6,597 Derivatives not designated as hedging instruments: Foreign exchange currency contracts Other current assets 3,992 8,945 Total $ 8,446 $ 15,542 LIABILITIES: Derivatives designated as hedging instruments: Foreign exchange currency contracts: Cash flow hedges Accrued expenses $ 76 $ — Derivatives not designated as hedging instruments: Foreign exchange currency contracts Accrued expenses 131 — Interest rate swaps Accrued expenses/ Other long-term liabilities 165 270 Total derivatives not designated as hedging instruments 296 270 Total $ 372 $ 270 |
Summary of gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings | The following table summarizes the gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings for the three and six months ended August 1, 2015 and August 2, 2014 (in thousands): Gain Recognized in OCI Location of Gain (Loss) Reclassified from Accumulated OCI into Earnings(1) Gain (Loss) Reclassified from Accumulated OCI into Earnings Three Months Ended Three Months Ended Aug 1, 2015 Aug 2, 2014 Aug 1, 2015 Aug 2, 2014 Derivatives designated as cash flow hedges: Foreign exchange currency contracts $ 5,343 $ 1,866 Cost of product sales $ 3,193 $ (265 ) Foreign exchange currency contracts $ 378 $ 1 Other income/expense $ 330 $ (25 ) Gain (Loss) Recognized in OCI Location of Gain (Loss) Reclassified from Accumulated OCI into Earnings(1) Gain (Loss) Reclassified from Accumulated OCI into Earnings Six Months Ended Six Months Ended Aug 1, 2015 Aug 2, 2014 Aug 1, 2015 Aug 2, 2014 Derivatives designated as cash flow hedges: Foreign exchange currency contracts $ 4,196 $ (706 ) Cost of product sales $ 4,943 $ (759 ) Foreign exchange currency contracts $ 230 $ (106 ) Other income/expense $ 816 $ (56 ) __________________________________ (1) The ineffective portion was immaterial during the three and six months ended August 1, 2015 and August 2, 2014 and was recorded in net earnings and included in interest income/expense. |
Summary of net after-tax derivative activity recorded in accumulated other comprehensive income (loss) | The following table summarizes net after-tax derivative activity recorded in accumulated other comprehensive income (loss) (in thousands): Three Months Ended Six Months Ended Aug 1, 2015 Aug 2, 2014 Aug 1, 2015 Aug 2, 2014 Beginning balance gain (loss) $ 4,296 $ (1,667 ) $ 7,157 $ (113 ) Net gains (losses) from changes in cash flow hedges 4,584 1,352 3,658 (706 ) Net (gains) losses reclassified to earnings (3,012 ) 681 (4,947 ) 1,185 Ending balance gain $ 5,868 $ 366 $ 5,868 $ 366 |
Summary of gains before taxes recognized on the derivative instruments not designated as hedging instruments in other income | The following table summarizes the gains before taxes recognized on the derivative instruments not designated as hedging instruments in other income for the three and six months ended August 1, 2015 and August 2, 2014 (in thousands): Location of Gain Recognized in Earnings Gain Recognized in Earnings Gain Recognized in Earnings Three Months Ended Six Months Ended Aug 1, 2015 Aug 2, 2014 Aug 1, 2015 Aug 2, 2014 Derivatives not designated as hedging instruments: Foreign exchange currency contracts Other income/expense $ 2,860 $ 3,984 $ 2,159 $ 1,195 Interest rate swaps Other income/expense $ 47 $ 57 $ 96 $ 132 |
Basis of Presentation (Details)
Basis of Presentation (Details) | 12 Months Ended | ||
Jan. 30, 2016 | Jan. 31, 2015 | Feb. 01, 2014 | |
Fiscal Year | |||
Number of days in fiscal year | 364 days | 364 days | |
Forecast | |||
Fiscal Year | |||
Number of days in fiscal year | 364 days |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2015 | Aug. 02, 2014 | Aug. 01, 2015 | Aug. 02, 2014 | |
Earnings Per Share [Abstract] | ||||
Net earnings attributable to Guess, Inc. | $ 18,289 | $ 21,954 | $ 21,630 | $ 19,853 |
Less net earnings attributable to nonvested restricted stockholders | 143 | 167 | 227 | 292 |
Net earnings attributable to common stockholders | $ 18,146 | $ 21,787 | $ 21,403 | $ 19,561 |
Weighted average common shares used in basic computations | 85,004,000 | 84,573,000 | 84,985,000 | 84,536,000 |
Effect of dilutive securities: | ||||
Stock options and restricted stock units (in shares) | 286,000 | 226,000 | 147,000 | 229,000 |
Weighted average common shares used in diluted computations | 85,290,000 | 84,799,000 | 85,132,000 | 84,765,000 |
Net earnings per common share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ 0.21 | $ 0.26 | $ 0.25 | $ 0.23 |
Diluted (in dollars per share) | $ 0.21 | $ 0.26 | $ 0.25 | $ 0.23 |
Antidilutive securities excluded from computation of earnings per share | ||||
Antidilutive equity awards excluded from computation of diluted weighted average common shares | 2,525,300 | 1,666,111 | 2,473,325 | 1,549,291 |
Performance-based or market-based units | ||||
Antidilutive securities excluded from computation of earnings per share | ||||
Antidilutive equity awards excluded from computation of diluted weighted average common shares | 425,866 | 425,866 | ||
Restricted stock units | ||||
Antidilutive securities excluded from computation of earnings per share | ||||
Antidilutive equity awards excluded from computation of diluted weighted average common shares | 259,700 | 259,700 |
Earnings Per Share (Details 2)
Earnings Per Share (Details 2) - Common Stock - USD ($) | 3 Months Ended | 6 Months Ended | |||
Aug. 01, 2015 | Aug. 02, 2014 | Aug. 01, 2015 | Aug. 02, 2014 | Jun. 26, 2012 | |
Share Repurchase Program | |||||
Number of common stock repurchased (in shares) | 0 | 0 | 0 | 0 | |
Shares repurchased, aggregate cost | $ 0 | $ 0 | $ 0 | $ 0 | |
2012 Share Repurchase Program | |||||
Share Repurchase Program | |||||
Value of common stock remaining to be repurchased | $ 495,800,000 | $ 495,800,000 | |||
2012 Share Repurchase Program | Minimum | |||||
Share Repurchase Program | |||||
Number of common stock authorized to be repurchased (in shares) | 0 | 0 | |||
2012 Share Repurchase Program | Maximum | |||||
Share Repurchase Program | |||||
Value of common stock authorized to be repurchased | $ 500,000,000 | ||||
Number of common stock authorized to be repurchased (in shares) | 0 | 0 |
Stockholders' Equity and Rede38
Stockholders' Equity and Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Aug. 01, 2015 | Aug. 02, 2014 | Aug. 01, 2015 | Aug. 02, 2014 | Jan. 31, 2015 | |
Stockholders' equity reconciliation | |||||
Common stock (in shares), beginning of the period | 85,323,154 | ||||
Treasury stock (in shares), beginning of the period | 54,235,846 | ||||
Stockholders' equity, balance at the beginning of the period | $ 1,089,446 | $ 1,169,986 | $ 1,169,986 | ||
Net earnings | $ 18,479 | $ 22,272 | 22,466 | $ 20,085 | 97,184 |
Foreign currency translation adjustment | (21,636) | (116,707) | |||
Gain (loss) on derivative financial instruments designated as cash flow hedges, net of income tax | (1,289) | 7,270 | |||
Loss on marketable securities, net of income tax | (8) | (106) | |||
Actuarial valuation gain (loss) and related amortization, curtailment and prior service credit amortization on defined benefit plans, net of income tax | 6,594 | (5,862) | |||
Issuance of common stock under stock compensation plans, net of tax effect | (1,842) | (1,937) | |||
Issuance of stock under Employee Stock Purchase Plan | 374 | 1,008 | |||
Share-based compensation | 8,052 | 15,342 | |||
Dividends | (38,658) | (76,982) | |||
Noncontrolling interest capital distribution | (3,830) | (355) | |||
Redeemable noncontrolling interest redemption value adjustment | $ (1,220) | $ 605 | |||
Common stock (in shares), end of the period | 85,763,440 | 85,763,440 | 85,323,154 | ||
Treasury stock (in shares), end of the period | 54,212,364 | 54,212,364 | 54,235,846 | ||
Stockholders' equity, balance at the end of the period | $ 1,058,449 | $ 1,058,449 | $ 1,089,446 | ||
Comprehensive income (loss), income tax effect | |||||
Gain (loss) on derivative financial instruments designated as cash flow hedges, tax effect | 44 | (721) | |||
Loss on marketable securities, tax effect | 6 | 61 | |||
Actuarial valuation gain (loss) and related amortization, curtailment and prior service credit amortization on defined benefit plans, tax effect | $ (3,979) | $ 2,335 | |||
Common Stock | |||||
Stockholders' equity reconciliation | |||||
Common stock (in shares), beginning of the period | 85,323,154 | 84,962,345 | 84,962,345 | ||
Issuance of common stock under stock compensation plans (in shares) | 416,804 | 313,271 | |||
Issuance of stock under Employee Stock Purchase Plan (in shares) | 23,482 | 47,538 | |||
Common stock (in shares), end of the period | 85,763,440 | 85,763,440 | 85,323,154 | ||
Treasury Stock | |||||
Stockholders' equity reconciliation | |||||
Treasury stock (in shares), beginning of the period | 54,235,846 | 54,283,384 | 54,283,384 | ||
Issuance of stock under Employee Stock Purchase Plan (in shares) | (23,482) | (47,538) | |||
Treasury stock (in shares), end of the period | 54,212,364 | 54,212,364 | 54,235,846 | ||
Guess, Inc. Stockholders’ Equity | |||||
Stockholders' equity reconciliation | |||||
Stockholders' equity, balance at the beginning of the period | $ 1,073,856 | $ 1,154,514 | $ 1,154,514 | ||
Net earnings | 21,630 | 94,570 | |||
Foreign currency translation adjustment | (21,036) | (114,566) | |||
Gain (loss) on derivative financial instruments designated as cash flow hedges, net of income tax | (1,289) | 7,270 | |||
Loss on marketable securities, net of income tax | (8) | (106) | |||
Actuarial valuation gain (loss) and related amortization, curtailment and prior service credit amortization on defined benefit plans, net of income tax | 6,594 | (5,862) | |||
Issuance of common stock under stock compensation plans, net of tax effect | (1,842) | (1,937) | |||
Issuance of stock under Employee Stock Purchase Plan | 374 | 1,008 | |||
Share-based compensation | 8,052 | 15,342 | |||
Dividends | (38,658) | (76,982) | |||
Noncontrolling interest capital distribution | 0 | 0 | |||
Redeemable noncontrolling interest redemption value adjustment | (1,220) | 605 | |||
Stockholders' equity, balance at the end of the period | $ 1,046,453 | 1,046,453 | 1,073,856 | ||
Nonredeemable Noncontrolling Interests | |||||
Stockholders' equity reconciliation | |||||
Stockholders' equity, balance at the beginning of the period | 15,590 | $ 15,472 | 15,472 | ||
Net earnings | 836 | 2,614 | |||
Foreign currency translation adjustment | (600) | (2,141) | |||
Gain (loss) on derivative financial instruments designated as cash flow hedges, net of income tax | 0 | 0 | |||
Loss on marketable securities, net of income tax | 0 | 0 | |||
Actuarial valuation gain (loss) and related amortization, curtailment and prior service credit amortization on defined benefit plans, net of income tax | 0 | 0 | |||
Issuance of common stock under stock compensation plans, net of tax effect | 0 | 0 | |||
Issuance of stock under Employee Stock Purchase Plan | 0 | 0 | |||
Share-based compensation | 0 | 0 | |||
Dividends | 0 | 0 | |||
Noncontrolling interest capital distribution | (3,830) | (355) | |||
Redeemable noncontrolling interest redemption value adjustment | 0 | 0 | |||
Stockholders' equity, balance at the end of the period | $ 11,996 | $ 11,996 | $ 15,590 |
Stockholders' Equity and Rede39
Stockholders' Equity and Redeemable Noncontrolling Interests (Details 2) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Aug. 01, 2015 | Jan. 31, 2015 | Aug. 01, 2015 | |
Redeemable noncontrolling interests reconciliation | |||
Redeemable noncontrolling interest, value at the beginning of the period | $ 4,437 | $ 5,830 | |
Foreign currency translation adjustment | (308) | (788) | |
Redeemable noncontrolling interest redemption value adjustment | 1,220 | (605) | |
Redeemable noncontrolling interest, value at the end of the period | 5,349 | 4,437 | |
Redeemable noncontrolling interests put arrangements | |||
Redeemable noncontrolling interests | 4,437 | 5,830 | $ 5,349 |
Guess Sud | |||
Redeemable noncontrolling interests reconciliation | |||
Redeemable noncontrolling interest, value at the beginning of the period | 3,400 | ||
Redeemable noncontrolling interest, value at the end of the period | $ 4,500 | 3,400 | |
Redeemable noncontrolling interests put arrangements | |||
Total outstanding equity interest in subsidiary covered by put arrangement (as a percent) | 40.00% | ||
Initial date put option can be exercised by noncontrolling interest holders | Jan. 30, 2012 | ||
Redeemable noncontrolling interests | $ 3,400 | 3,400 | $ 4,500 |
Guess Brazil | |||
Redeemable noncontrolling interests reconciliation | |||
Redeemable noncontrolling interest, value at the beginning of the period | 1,000 | ||
Redeemable noncontrolling interest, value at the end of the period | $ 800 | 1,000 | |
Redeemable noncontrolling interests put arrangements | |||
Total outstanding equity interest in subsidiary covered by put arrangement (as a percent) | 40.00% | ||
Initial period put option can be exercised by noncontrolling interest holder (by year) | 6 years | ||
Period put arrangement can be exercised by noncontrolling interest holder after initial and subsequent exercise periods, subject to certain time restrictions (by year) | 3 years | ||
Redeemable noncontrolling interests | $ 1,000 | $ 1,000 | $ 800 |
Stockholders' Equity and Rede40
Stockholders' Equity and Redeemable Noncontrolling Interests (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2015 | Aug. 02, 2014 | Aug. 01, 2015 | Aug. 02, 2014 | |
Accumulated other comprehensive income (loss), net of tax | ||||
Beginning balance | $ (129,963) | $ 6,533 | $ (127,065) | $ (13,801) |
Gains (losses) arising during the period | (9,091) | (18,097) | (10,360) | 1,678 |
Reclassification to net earnings for (gains) losses realized | (3,750) | 790 | (5,379) | 1,349 |
Net other comprehensive income (loss) | (12,841) | (17,307) | (15,739) | 3,027 |
Ending balance | (142,804) | (10,774) | (142,804) | (10,774) |
Foreign Currency Translation Adjustment | ||||
Accumulated other comprehensive income (loss), net of tax | ||||
Beginning balance | (121,908) | 14,846 | (121,569) | (7,003) |
Gains (losses) arising during the period | (20,697) | (19,424) | (21,036) | 2,425 |
Reclassification to net earnings for (gains) losses realized | 0 | 0 | 0 | 0 |
Net other comprehensive income (loss) | (20,697) | (19,424) | (21,036) | 2,425 |
Ending balance | (142,605) | (4,578) | (142,605) | (4,578) |
Derivative Financial Instruments Designated as Cash Flow Hedges | ||||
Accumulated other comprehensive income (loss), net of tax | ||||
Beginning balance | 4,296 | (1,667) | 7,157 | (113) |
Gains (losses) arising during the period | 4,584 | 1,352 | 3,658 | (706) |
Reclassification to net earnings for (gains) losses realized | (3,012) | 681 | (4,947) | 1,185 |
Net other comprehensive income (loss) | 1,572 | 2,033 | (1,289) | 479 |
Ending balance | 5,868 | 366 | 5,868 | 366 |
Marketable Securities | ||||
Accumulated other comprehensive income (loss), net of tax | ||||
Beginning balance | (7) | 33 | (3) | 103 |
Gains (losses) arising during the period | (4) | (25) | (8) | (41) |
Reclassification to net earnings for (gains) losses realized | 0 | 0 | 0 | (54) |
Net other comprehensive income (loss) | (4) | (25) | (8) | (95) |
Ending balance | (11) | 8 | (11) | 8 |
Defined Benefit Plans | ||||
Accumulated other comprehensive income (loss), net of tax | ||||
Beginning balance | (12,344) | (6,679) | (12,650) | (6,788) |
Gains (losses) arising during the period | 7,026 | 0 | 7,026 | 0 |
Reclassification to net earnings for (gains) losses realized | (738) | 109 | (432) | 218 |
Net other comprehensive income (loss) | 6,288 | 109 | 6,594 | 218 |
Ending balance | $ (6,056) | $ (6,570) | $ (6,056) | $ (6,570) |
Stockholders' Equity and Rede41
Stockholders' Equity and Redeemable Noncontrolling Interests (Details 4) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 01, 2015 | Aug. 02, 2014 | Aug. 01, 2015 | Aug. 02, 2014 | ||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings | |||||
Cost of product sales | $ 348,147 | $ 391,794 | $ 661,486 | $ 738,104 | |
Other income/expense | (3,708) | (4,766) | (6,334) | (3,647) | |
Actuarial loss amortization | 430 | 235 | 943 | 469 | |
Prior service credit amortization | (39) | (58) | (97) | (116) | |
Curtailment | (1,651) | 0 | (1,651) | 0 | |
Income tax expense | 10,940 | 11,900 | 13,769 | 10,871 | |
Net earnings attributable to Guess, Inc. | (18,289) | (21,954) | (21,630) | (19,853) | |
Reclassifications out of accumulated other comprehensive income (loss) | |||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings | |||||
Net earnings attributable to Guess, Inc. | (3,750) | 790 | (5,379) | 1,349 | |
Derivative Financial Instruments Designated as Cash Flow Hedges | Reclassifications out of accumulated other comprehensive income (loss) | |||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings | |||||
Cost of product sales | (3,193) | 265 | (4,943) | 759 | |
Other income/expense | (330) | 25 | (816) | 56 | |
Income tax expense | 511 | 391 | 812 | 370 | |
Net earnings attributable to Guess, Inc. | (3,012) | 681 | (4,947) | 1,185 | |
Marketable Securities | Reclassifications out of accumulated other comprehensive income (loss) | |||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings | |||||
Other income/expense | 0 | 0 | 0 | (87) | |
Income tax expense | 0 | 0 | 0 | 33 | |
Net earnings attributable to Guess, Inc. | 0 | 0 | 0 | (54) | |
Defined Benefit Plans | Reclassifications out of accumulated other comprehensive income (loss) | |||||
Reclassifications out of accumulated other comprehensive income (loss) to net earnings | |||||
Actuarial loss amortization | [1] | 430 | 235 | 943 | 469 |
Prior service credit amortization | [1] | (39) | (58) | (97) | (116) |
Curtailment | [1] | (1,651) | 0 | (1,651) | 0 |
Income tax expense | 522 | (68) | 373 | (135) | |
Net earnings attributable to Guess, Inc. | $ (738) | $ 109 | $ (432) | $ 218 | |
[1] | These accumulated other comprehensive income (loss) components are included in the computation of net periodic defined benefit pension cost. Refer to Note 13 for further information. |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Aug. 01, 2015 | Jan. 31, 2015 |
Accounts receivable | ||
Accounts receivable, gross | $ 228,210 | $ 248,125 |
Less allowance for doubtful accounts | 29,475 | 31,920 |
Accounts receivable, net | 198,735 | 216,205 |
Trade receivables | ||
Accounts receivable | ||
Accounts receivable, gross | 208,976 | 229,618 |
Royalty receivables | ||
Accounts receivable | ||
Accounts receivable, gross | 10,830 | 10,118 |
Other receivables | ||
Accounts receivable | ||
Accounts receivable, gross | $ 8,404 | $ 8,389 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Aug. 01, 2015 | Jan. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 3,409 | $ 4,548 |
Work in progress | 59 | 77 |
Finished goods | 331,992 | 314,453 |
Inventories | 335,460 | 319,078 |
Allowance to write down inventories to the lower of cost or market | $ 18,600 | $ 19,700 |
Restructuring Charges (Details)
Restructuring Charges (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Aug. 01, 2015 | Aug. 02, 2014 | Aug. 01, 2015 | Aug. 02, 2014 | Jan. 31, 2015 | Feb. 01, 2014 | |
Restructuring activity | ||||||
Restructuring charges | $ 0 | $ 0 | $ 0 | $ 0 | ||
Severance, impairment and lease termination costs | ||||||
Restructuring activity | ||||||
Restructuring charges | $ 12,400,000 | |||||
Severance | ||||||
Restructuring reserve activity | ||||||
Beginning balance | 276,000 | $ 4,578,000 | $ 4,578,000 | |||
Cash payments | (39,000) | (2,952,000) | ||||
Foreign currency and other adjustments | (56,000) | (1,350,000) | ||||
Ending balance | 181,000 | 181,000 | 276,000 | $ 4,578,000 | ||
Accrued expenses | ||||||
Restructuring activity | ||||||
Restructuring reserve included in accrued expenses | $ 181,000 | $ 181,000 | $ 276,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Aug. 01, 2015 | Aug. 02, 2014 | Jan. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate (as a percent) | 38.00% | 35.10% | |
Aggregate accruals for uncertain tax positions, including penalties and interest | $ 14.3 | $ 14.4 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 01, 2015USD ($) | Aug. 02, 2014USD ($) | Aug. 01, 2015USD ($)segment | Aug. 02, 2014USD ($) | ||
Segment information of net revenue and earnings (loss) from operations | |||||
Number of reportable segments | segment | 5 | ||||
Net revenue | $ 546,264 | $ 608,571 | $ 1,025,088 | $ 1,131,112 | |
Licensing | 25,327 | 26,792 | 51,192 | 52,405 | |
Earnings (loss) from operations | 26,201 | 29,858 | 30,554 | 27,881 | |
Corporate Overhead | |||||
Segment information of net revenue and earnings (loss) from operations | |||||
Earnings (loss) from operations | (25,403) | (22,333) | (44,558) | (43,106) | |
Americas Retail | |||||
Segment information of net revenue and earnings (loss) from operations | |||||
Net revenue | [1] | 232,456 | 244,000 | 446,705 | 472,344 |
Earnings (loss) from operations | [1] | 5,244 | (4,662) | (1,965) | (13,061) |
Europe | |||||
Segment information of net revenue and earnings (loss) from operations | |||||
Net revenue | 199,375 | 235,260 | 336,772 | 394,418 | |
Earnings (loss) from operations | 18,186 | 24,513 | 14,518 | 17,881 | |
Asia | |||||
Segment information of net revenue and earnings (loss) from operations | |||||
Net revenue | 56,745 | 64,267 | 120,780 | 134,385 | |
Earnings (loss) from operations | 887 | 2,264 | 5,500 | 5,617 | |
Americas Wholesale | |||||
Segment information of net revenue and earnings (loss) from operations | |||||
Net revenue | [1] | 32,361 | 38,252 | 69,639 | 77,560 |
Earnings (loss) from operations | [1] | 4,872 | 5,167 | 11,619 | 12,920 |
Licensing | |||||
Segment information of net revenue and earnings (loss) from operations | |||||
Licensing | 25,327 | 26,792 | 51,192 | 52,405 | |
Earnings (loss) from operations | $ 22,415 | $ 24,909 | $ 45,440 | $ 47,630 | |
[1] | Beginning in the second quarter of fiscal 2016, the Company changed the names of its “North American Retail” and “North American Wholesale” segments to “Americas Retail” and “Americas Wholesale” to better reflect that these segments are inclusive of its operations in North America as well as Central and South America. There have been no changes to the underlying reporting in either segment. |
Borrowings and Capital Lease 47
Borrowings and Capital Lease Obligations (Details) | Jun. 23, 2015USD ($) | Aug. 01, 2015USD ($)facility | Jan. 31, 2015USD ($) |
Borrowings and capital lease obligations | |||
European capital lease, maturing quarterly through May 2016 | $ 4,840,000 | $ 5,745,000 | |
Other debt | 2,057,000 | 1,968,000 | |
Capital lease obligations and borrowings, total | 6,897,000 | 7,713,000 | |
Less current installments | 4,840,000 | 1,548,000 | |
Long-term debt and capital lease obligations | 2,057,000 | $ 6,165,000 | |
Europe | Foreign line of credit | |||
Credit Facilities | |||
Current borrowing capacity | 80,800,000 | ||
Credit Facility, outstanding amount | $ 0 | ||
Interest rate, low end of the range (as a percent) | 0.90% | ||
Interest rate, high end of the range (as a percent) | 6.80% | ||
Number of credit facilities subject to minimum net equity requirement | facility | 1 | ||
Maximum borrowing capacity of the credit facility which is subject to a minimum net equity requirement | $ 38,400,000 | ||
Europe | Documentary letters of credit | Foreign line of credit | |||
Credit Facilities | |||
Letters of credit outstanding | 3,000,000 | ||
European capital lease, maturing quarterly through May 2016 | Italy | |||
Borrowings and capital lease obligations | |||
European capital lease, maturing quarterly through May 2016 | $ 4,840,000 | ||
Capital Lease | |||
Lease expiration date | May 1, 2016 | ||
European capital lease, maturing quarterly through May 2016 | Italy | Interest rate swaps | |||
Capital Lease | |||
Fixed rate of interest rate swap designated as a non-hedging instrument (as a percent) | 3.55% | ||
Interest rate swap maturity date | Feb. 1, 2016 | ||
Fair value of the interest rate swap liability | $ 200,000 | ||
Credit Facility | |||
Credit Facilities | |||
Credit Facility, outstanding amount | $ 0 | ||
Priority level for Credit Facility | secured by a first priority lien on substantially all of the assets of the Company and such domestic and Canadian subsidiaries | ||
Credit Facility | Revolving Credit Facility | |||
Credit Facilities | |||
Debt maturity period (in years) | 5 years | ||
Maximum borrowing capacity | $ 150,000,000 | $ 150,000,000 | |
Current borrowing capacity | 150,000,000 | ||
Credit Facility | Accordion feature | |||
Credit Facilities | |||
Maximum borrowing capacity | 150,000,000 | $ 150,000,000 | |
Credit Facility | Prior credit facility | |||
Credit Facilities | |||
Maximum borrowing capacity | $ 300,000,000 | ||
Debt maturity date | Jul. 31, 2016 | ||
Credit Facility, outstanding amount | $ 0 | ||
Accrued interest | 0 | ||
Credit Facility | U.S. line of credit | Base rate | Minimum | |||
Credit Facilities | |||
Interest rate margin (as a percent) | 0.25% | ||
Credit Facility | U.S. line of credit | Base rate | Maximum | |||
Credit Facilities | |||
Interest rate margin (as a percent) | 0.75% | ||
Credit Facility | U.S. line of credit | LIBOR | |||
Credit Facilities | |||
Interest rate margin (as a percent) | 1.00% | ||
Credit Facility | U.S. line of credit | LIBOR | Minimum | |||
Credit Facilities | |||
Interest rate margin (as a percent) | 1.25% | ||
Credit Facility | U.S. line of credit | LIBOR | Maximum | |||
Credit Facilities | |||
Interest rate margin (as a percent) | 1.75% | ||
Credit Facility | U.S. line of credit | Federal funds rate | |||
Credit Facilities | |||
Interest rate margin (as a percent) | 0.50% | ||
Credit Facility | Standby letters of credit | |||
Credit Facilities | |||
Letters of credit outstanding | $ 1,700,000 | ||
Credit Facility | Documentary letters of credit | |||
Credit Facilities | |||
Letters of credit outstanding | 0 | ||
Credit Facility | Canada | Foreign line of credit | |||
Credit Facilities | |||
Maximum borrowing capacity | $ 50,000,000 | $ 50,000,000 | |
Credit Facility | Canada | Foreign line of credit | Prime rate | Minimum | |||
Credit Facilities | |||
Interest rate margin (as a percent) | 0.25% | ||
Credit Facility | Canada | Foreign line of credit | Prime rate | Maximum | |||
Credit Facilities | |||
Interest rate margin (as a percent) | 0.75% | ||
Credit Facility | Canada | Foreign line of credit | Canadian BA rate | |||
Credit Facilities | |||
Interest rate margin (as a percent) | 1.00% | ||
Credit Facility | Canada | Foreign line of credit | Canadian BA rate | Minimum | |||
Credit Facilities | |||
Interest rate margin (as a percent) | 1.25% | ||
Credit Facility | Canada | Foreign line of credit | Canadian BA rate | Maximum | |||
Credit Facilities | |||
Interest rate margin (as a percent) | 1.75% | ||
Credit Facility | Canada | Foreign line of credit | Bank of Canada overnight rate | |||
Credit Facilities | |||
Interest rate margin (as a percent) | 0.50% |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 07, 2015 | May. 01, 2015 | Apr. 02, 2015 | Apr. 02, 2014 | Aug. 01, 2015 | Aug. 02, 2014 | Aug. 01, 2015 | Aug. 02, 2014 |
Disclosure of share-based compensation information under stock plans | ||||||||
Share-based compensation expense | $ 4,440 | $ 4,156 | $ 8,052 | $ 7,613 | ||||
Share-Based Compensation, Additional Disclosures | ||||||||
Unrecognized compensation cost, adjusted for estimated forfeitures, related to nonvested stock options | 5,100 | $ 5,100 | ||||||
Weighted average fair values of stock options granted during the period (in dollars per share) | $ 3.71 | $ 6.23 | ||||||
Granted (in shares) | 577,700 | 365,600 | ||||||
CEO | ||||||||
Share-Based Compensation, Additional Disclosures | ||||||||
Granted (in shares) | 600,000 | |||||||
Employee Stock Purchase Plan | ||||||||
Disclosure of share-based compensation information under stock plans | ||||||||
Share-based compensation expense | 51 | 97 | $ 95 | $ 160 | ||||
Stock option | ||||||||
Disclosure of share-based compensation information under stock plans | ||||||||
Share-based compensation expense | $ 439 | 620 | $ 920 | 1,076 | ||||
Share-Based Compensation, Additional Disclosures | ||||||||
Weighted average period for recognition of unrecognized compensation cost (in years/months/days) | 1 year 8 months 12 days | 1 year 8 months 12 days | ||||||
Nonvested stock awards/units | ||||||||
Disclosure of share-based compensation information under stock plans | ||||||||
Share-based compensation expense | $ 3,950 | $ 3,439 | $ 7,037 | $ 6,377 | ||||
Share-Based Compensation, Additional Disclosures | ||||||||
Unrecognized compensation cost, adjusted for estimated forfeitures, related to nonvested stock awards/units | $ 29,300 | $ 29,300 | ||||||
Weighted average period for recognition of unrecognized compensation cost (in years/months/days) | 1 year 8 months 12 days | 1 year 8 months 12 days | ||||||
Number of Units | ||||||||
Granted (in shares) | 401,700 | 301,200 | ||||||
Nonvested stock awards/units | CEO | ||||||||
Number of Units | ||||||||
Granted (in shares) | 250,000 | |||||||
Restricted stock units | CEO | ||||||||
Number of Units | ||||||||
Granted (in shares) | 150,000 | |||||||
Performance-based awards/units | ||||||||
Number of Units | ||||||||
Nonvested at the beginning of the period (in shares) | 413,834 | |||||||
Granted (in shares) | 425,866 | |||||||
Vested (in shares) | (33,333) | |||||||
Forfeited (in shares) | (159,700) | |||||||
Nonvested at the end of the period (in shares) | 646,667 | 646,667 | ||||||
Weighted Average Grant Date Fair Value | ||||||||
Nonvested at the beginning of the period (in dollars per share) | $ 29.66 | |||||||
Granted (in dollars per share) | 19.39 | |||||||
Vested (in dollars per share) | 27.86 | |||||||
Forfeited (in dollars per share) | 27.86 | |||||||
Nonvested at the end of the period (in dollars per share) | $ 23.44 | $ 23.44 | ||||||
Performance Shares | CEO | ||||||||
Share-Based Compensation, Additional Disclosures | ||||||||
Period which award is subject to a performance condition (in years/months) | 6 months | |||||||
Performance Shares | CEO | Vesting, Tranche One | ||||||||
Share-Based Compensation, Additional Disclosures | ||||||||
Vesting rights (as a percentage) | 25.00% | |||||||
Performance Shares | CEO | Vesting, Tranche Two | ||||||||
Share-Based Compensation, Additional Disclosures | ||||||||
Vesting rights (as a percentage) | 25.00% | |||||||
Performance Shares | CEO | Vesting, Tranche Three | ||||||||
Share-Based Compensation, Additional Disclosures | ||||||||
Vesting rights (as a percentage) | 25.00% | |||||||
Performance Shares | CEO | Vesting, Tranche Four | ||||||||
Share-Based Compensation, Additional Disclosures | ||||||||
Vesting rights (as a percentage) | 25.00% | |||||||
Performance Shares | Executive Chairman of the Board and Chief Creative Officer | ||||||||
Share-Based Compensation, Additional Disclosures | ||||||||
Period which award is subject to a performance condition (in years/months) | 1 year | |||||||
Performance Shares | Executive Chairman of the Board and Chief Creative Officer | Vesting, Tranche One | ||||||||
Share-Based Compensation, Additional Disclosures | ||||||||
Vesting period (in years) | 1 year | |||||||
Performance Shares | Executive Chairman of the Board and Chief Creative Officer | Vesting, Tranche Two | ||||||||
Share-Based Compensation, Additional Disclosures | ||||||||
Vesting period (in years) | 1 year | |||||||
Performance Shares | Executive Chairman of the Board and Chief Creative Officer | Vesting, Tranche Three | ||||||||
Share-Based Compensation, Additional Disclosures | ||||||||
Vesting period (in years) | 1 year | |||||||
Target Performance Shares | Executive Chairman of the Board and Chief Creative Officer | ||||||||
Share-Based Compensation, Additional Disclosures | ||||||||
Period which award is subject to a performance condition (in years/months) | 1 year | |||||||
Target Performance Shares | Executive Chairman of the Board and Chief Creative Officer | Minimum | ||||||||
Share-Based Compensation, Additional Disclosures | ||||||||
Vesting rights (as a percentage) | 0.00% | |||||||
Target Performance Shares | Executive Chairman of the Board and Chief Creative Officer | Maximum | ||||||||
Share-Based Compensation, Additional Disclosures | ||||||||
Vesting rights (as a percentage) | 150.00% | |||||||
Target Performance Shares | Executive Chairman of the Board and Chief Creative Officer | Vesting, Tranche One | ||||||||
Share-Based Compensation, Additional Disclosures | ||||||||
Vesting period (in years) | 3 years | |||||||
Market-based awards/units | Executive Chairman of the Board and Chief Creative Officer | ||||||||
Share-Based Compensation, Additional Disclosures | ||||||||
Period which award is subject to a market condition (in years) | 3 years | |||||||
Number of Units | ||||||||
Granted (in shares) | 183,368 | |||||||
Market-based awards/units | Executive Chairman of the Board and Chief Creative Officer | Minimum | ||||||||
Share-Based Compensation, Additional Disclosures | ||||||||
Vesting rights (as a percentage) | 0.00% | |||||||
Market-based awards/units | Executive Chairman of the Board and Chief Creative Officer | Maximum | ||||||||
Share-Based Compensation, Additional Disclosures | ||||||||
Vesting rights (as a percentage) | 150.00% | |||||||
Market-based awards/units | Executive Chairman of the Board and Chief Creative Officer | Vesting, Tranche One | ||||||||
Share-Based Compensation, Additional Disclosures | ||||||||
Vesting year | 2,019 |
Related Party Transactions (Det
Related Party Transactions (Details) | Jan. 28, 2012USD ($) | Aug. 01, 2015USD ($)lease | Aug. 02, 2014USD ($) |
Marciano Trusts | |||
Related Party Transactions | |||
Number of leases under related party lease agreements | lease | 3 | ||
Expenses under related party arrangement | $ 2,700,000 | $ 3,000,000 | |
Marciano Trusts | Minimum | |||
Related Party Transactions | |||
Lease expiration date (by year) | 2,015 | ||
Marciano Trusts | Maximum | |||
Related Party Transactions | |||
Lease expiration date (by year) | 2,020 | ||
MPM Financial LLC | |||
Related Party Transactions | |||
Payments under related party agreement | $ 300,000 | 700,000 | |
Marciano Consulting Agreement | |||
Related Party Transactions | |||
Service term | 30 years | ||
Consulting agreement term (in years) | 2 years | ||
Consulting agreement, number of years during the extension period | 1 year | ||
Expenses under related party arrangement | $ 500,000 | 0 | 300,000 |
Expiration date of consulting agreement | Jan. 28, 2015 | ||
Harmony Collection LLC | |||
Related Party Transactions | |||
Payments under related party agreement | $ 0 | $ 700,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - number_of_extension_options | 1 Months Ended | 6 Months Ended |
Mar. 31, 2014 | Aug. 01, 2015 | |
Property leases | Maximum | ||
Leases | ||
Lease expiration date | Sep. 30, 2031 | |
Retail store leases | Minimum | ||
Leases | ||
Percentage of annual sales volume used for incremental rent on certain retail store leases | 2.00% | |
Retail store leases | Maximum | ||
Leases | ||
Percentage of annual sales volume used for incremental rent on certain retail store leases | 12.00% | |
Equipment operating leases | Maximum | ||
Leases | ||
Lease expiration date | Mar. 30, 2020 | |
U.S. distribution center lease | ||
Leases | ||
Lease term | 10 years | |
Lease expiration date (by year) | 2,024 | |
Number of extension options available | 2 | |
Terms for extension options | 5 years |
Commitments and Contingencies51
Commitments and Contingencies (Details 2) $ in Thousands, € in Millions | Nov. 08, 2013USD ($) | Jul. 19, 2012USD ($) | Jul. 31, 2015USD ($)Plaintiff | Aug. 01, 2015USD ($)subsidiary | Aug. 01, 2015EUR (€)subsidiary | Jan. 30, 2015trademark | May. 02, 2013trademark |
Italy | Italian Customs Agency | Europe | |||||||
Loss contingency | |||||||
Number of subsidiaries under audit by the Italian Customs Agency | subsidiary | 1 | 1 | |||||
Customs tax assessments including potential penalties and interest | $ 10,800 | € 9.8 | |||||
Canceled customs tax assessments | $ 1,800 | € 1.7 | |||||
Italy | Italian Customs Agency | Minimum | Europe | |||||||
Loss contingency | |||||||
Period under audit by the Italian Customs Agency | Jul. 1, 2010 | Jul. 1, 2010 | |||||
Period covering canceled assessments | Jul. 1, 2010 | Jul. 1, 2010 | |||||
Italy | Italian Customs Agency | Maximum | Europe | |||||||
Loss contingency | |||||||
Period under audit by the Italian Customs Agency | Dec. 31, 2012 | Dec. 31, 2012 | |||||
Period covering canceled assessments | Sep. 30, 2010 | Sep. 30, 2010 | |||||
Judicial ruling | U.S. | Gucci America, Inc. | |||||||
Loss contingency | |||||||
Damages sought in litigation case | $ 26,000 | ||||||
Accounting profits sought by plaintiff as compensation | 99,000 | ||||||
Monetary damages awarded by court | 2,300 | ||||||
Monetary damages awarded by court to be paid by the Company's licensees | $ 2,300 | ||||||
Pending litigation | U.S. | Isaguirre | |||||||
Loss contingency | |||||||
Number of plaintiffs | Plaintiff | 2 | ||||||
Settlement amount | $ 5,250 | ||||||
Pending litigation | Italy | Gucci America, Inc. | |||||||
Loss contingency | |||||||
Number of Italian trademark registrations to be cancelled by plaintiff | trademark | 3 | ||||||
Number of European Community trademark registrations to be cancelled by plaintiff | trademark | 4 | ||||||
Pending litigation | China | Gucci America, Inc. | |||||||
Loss contingency | |||||||
Monetary damages awarded by court | $ 80 | ||||||
Pending litigation | France | Gucci America, Inc. | |||||||
Loss contingency | |||||||
Number of European Community trademark registrations to be cancelled by plaintiff | trademark | 2 | ||||||
Number of international trademark registrations to be cancelled by plaintiff | trademark | 1 |
Defined Benefit Plans (Details)
Defined Benefit Plans (Details) $ in Thousands, SFr in Millions | 3 Months Ended | 6 Months Ended | ||||||||
Aug. 01, 2015USD ($)participant | Aug. 01, 2015CHF (SFr) | May. 02, 2015USD ($) | Aug. 02, 2014USD ($) | Aug. 01, 2015USD ($)participant | Aug. 01, 2015CHF (SFr) | Aug. 02, 2014USD ($) | Aug. 01, 2015CHF (SFr)participant | Jan. 31, 2015USD ($) | Jan. 31, 2015CHF (SFr) | |
Components of net periodic defined benefit pension (credit) cost | ||||||||||
Actuarial gain | $ 11,378 | $ 0 | $ 11,378 | $ 0 | ||||||
SERP | ||||||||||
Components of net periodic defined benefit pension (credit) cost | ||||||||||
Interest cost | 495 | 572 | 991 | 1,144 | ||||||
Net amortization of unrecognized prior service credit | (39) | (58) | (97) | (116) | ||||||
Net amortization of actuarial losses | 290 | 235 | 718 | 469 | ||||||
Curtailment gain | (1,651) | 0 | (1,651) | 0 | ||||||
Net periodic defined benefit pension (credit) cost | $ (905) | 749 | $ (39) | 1,497 | ||||||
Number of employees considered actively participating under the terms of the SERP | participant | 0 | 0 | 0 | |||||||
Actuarial gain | $ 11,378 | $ 11,378 | ||||||||
SERP benefit payments | 400 | 300 | 800 | 300 | ||||||
Swiss Pension Plan | ||||||||||
Components of net periodic defined benefit pension (credit) cost | ||||||||||
Net periodic defined benefit pension (credit) cost | 500 | SFr 0.4 | 900 | SFr 0.9 | ||||||
Projected benefit obligation | 15,000 | 15,000 | SFr 14.5 | $ 15,100 | SFr 13.9 | |||||
Plan assets held at the independent fiduciary | 12,500 | 12,500 | 12.1 | 12,500 | 11.5 | |||||
Other income/expense | SERP | ||||||||||
Components of net periodic defined benefit pension (credit) cost | ||||||||||
Gain (loss) as a result of changes in value of the insurance policy investments, included in other income and expense | (300) | $ 700 | 1,600 | $ 2,200 | ||||||
Realized gain resulting from payout on insurance policy investments | $ 700 | 700 | ||||||||
Other assets | SERP | ||||||||||
Components of net periodic defined benefit pension (credit) cost | ||||||||||
Cash surrender values of the insurance policies held in a rabbi trust | 55,900 | 55,900 | 53,600 | |||||||
Accrued expenses and other long-term liabilities | SERP | ||||||||||
Components of net periodic defined benefit pension (credit) cost | ||||||||||
Projected benefit obligation | 50,600 | 50,600 | 61,900 | |||||||
Other long-term liabilities | Swiss Pension Plan | ||||||||||
Components of net periodic defined benefit pension (credit) cost | ||||||||||
Net liability | $ 2,500 | $ 2,500 | SFr 2.4 | $ 2,600 | SFr 2.4 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Aug. 01, 2015 | Jan. 31, 2015 | |
Transfers of financial instruments between the three levels of fair value hierarchy | ||
Value of transfers between levels | $ 0 | $ 0 |
Assets and liabilities measured at fair value on a recurring basis | ||
Assets: | ||
Foreign exchange currency contracts, Assets | 8,446,000 | 15,542,000 |
Available-for-sale securities | 23,000 | 36,000 |
Total Assets | 8,469,000 | 15,578,000 |
Liabilities: | ||
Foreign exchange currency contracts, Liabilities | 207,000 | 0 |
Interest rate swap | 165,000 | 270,000 |
Deferred compensation obligations | 11,213,000 | 9,133,000 |
Total Liabilities | 11,585,000 | 9,403,000 |
Assets and liabilities measured at fair value on a recurring basis | Level 1 | ||
Assets: | ||
Foreign exchange currency contracts, Assets | 0 | 0 |
Available-for-sale securities | 23,000 | 36,000 |
Total Assets | 23,000 | 36,000 |
Liabilities: | ||
Foreign exchange currency contracts, Liabilities | 0 | 0 |
Interest rate swap | 0 | 0 |
Deferred compensation obligations | 0 | 0 |
Total Liabilities | 0 | 0 |
Assets and liabilities measured at fair value on a recurring basis | Level 2 | ||
Assets: | ||
Foreign exchange currency contracts, Assets | 8,446,000 | 15,542,000 |
Available-for-sale securities | 0 | 0 |
Total Assets | 8,446,000 | 15,542,000 |
Liabilities: | ||
Foreign exchange currency contracts, Liabilities | 207,000 | 0 |
Interest rate swap | 165,000 | 270,000 |
Deferred compensation obligations | 11,213,000 | 9,133,000 |
Total Liabilities | 11,585,000 | 9,403,000 |
Assets and liabilities measured at fair value on a recurring basis | Level 3 | ||
Assets: | ||
Foreign exchange currency contracts, Assets | 0 | 0 |
Available-for-sale securities | 0 | 0 |
Total Assets | 0 | 0 |
Liabilities: | ||
Foreign exchange currency contracts, Liabilities | 0 | 0 |
Interest rate swap | 0 | 0 |
Deferred compensation obligations | 0 | 0 |
Total Liabilities | $ 0 | $ 0 |
Fair Value Measurements (Deta54
Fair Value Measurements (Details 2) - Marketable equity securities - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
May. 03, 2014 | Aug. 02, 2014 | |
Available-for-sale securities | ||
Proceeds from sale of available-for-sale securities | $ 598 | $ 598 |
Other income/expense | ||
Available-for-sale securities | ||
Gains recognized on sale of available-for-sale securities | $ 100 | $ 100 |
Fair Value Measurements (Deta55
Fair Value Measurements (Details 3) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2015 | Aug. 02, 2014 | Aug. 01, 2015 | Aug. 02, 2014 | |
Asset impairment charge | ||||
Period of time new retail locations in penetrated markets would need to be opened to be considered for impairment | 1 year | |||
Period of time new retail locations in new markets would need to be opened to be considered for impairment | 2 years | |||
Selling, general and administrative expenses | North America and Europe | Retail stores | ||||
Asset impairment charge | ||||
Impairment charges | $ 0.7 | $ 4.6 | $ 1.8 | $ 4.8 |
Derivative Financial Instrume56
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | Aug. 01, 2015 | Jan. 31, 2015 |
ASSETS: | ||
Derivatives, assets | $ 8,446 | $ 15,542 |
LIABILITIES: | ||
Derivatives, liabilities | 372 | 270 |
Derivatives designated as hedging instruments: | Foreign exchange currency contracts | Other current assets/Other assets | Cash flow hedges | ||
ASSETS: | ||
Derivatives, assets | 4,454 | 6,597 |
Derivatives designated as hedging instruments: | Foreign exchange currency contracts | Accrued expenses | Cash flow hedges | ||
LIABILITIES: | ||
Derivatives, liabilities | 76 | 0 |
Derivatives not designated as hedging instruments: | ||
LIABILITIES: | ||
Derivatives, liabilities | 296 | 270 |
Derivatives not designated as hedging instruments: | Foreign exchange currency contracts | Other current assets | ||
ASSETS: | ||
Derivatives, assets | 3,992 | 8,945 |
Derivatives not designated as hedging instruments: | Foreign exchange currency contracts | Accrued expenses | ||
LIABILITIES: | ||
Derivatives, liabilities | 131 | 0 |
Derivatives not designated as hedging instruments: | Interest rate swaps | Accrued expenses/Other long-term liabilities | ||
LIABILITIES: | ||
Derivatives, liabilities | $ 165 | $ 270 |
Derivative Financial Instrume57
Derivative Financial Instruments (Details 2) - Cash flow hedges - USD ($) $ in Millions | 6 Months Ended | |
Aug. 01, 2015 | Jan. 31, 2015 | |
Europe | ||
Forward contracts designated as hedging instruments | ||
U.S. dollar forward contracts purchased, total notional amount | $ 82.2 | |
U.S. dollar forward contracts outstanding, maximum remaining maturity period (in months) | 18 months | |
Canada | ||
Forward contracts designated as hedging instruments | ||
U.S. dollar forward contracts purchased, total notional amount | $ 43.8 | |
U.S. dollar forward contracts outstanding, maximum remaining maturity period (in months) | 18 months | |
Foreign exchange currency contracts | Europe | ||
Forward contracts designated as hedging instruments | ||
U.S. dollar forward contracts outstanding | $ 92.9 | $ 50.8 |
Foreign exchange currency contracts | Canada | ||
Forward contracts designated as hedging instruments | ||
U.S. dollar forward contracts outstanding | $ 43.8 | $ 24.5 |
Derivative Financial Instrume58
Derivative Financial Instruments (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 01, 2015 | Aug. 02, 2014 | Aug. 01, 2015 | Aug. 02, 2014 | ||
Net after-tax derivative activity recorded in accumulated other comprehensive income (loss) | |||||
Beginning balance gain (loss) | $ 4,296 | $ (1,667) | $ 7,157 | $ (113) | |
Net gains (losses) from changes in cash flow hedges | 4,584 | 1,352 | 3,658 | (706) | |
Net (gains) losses reclassified to earnings | (3,012) | 681 | (4,947) | 1,185 | |
Ending balance gain | 5,868 | 366 | 5,868 | 366 | |
Foreign exchange currency cash flow hedge unrealized gain to be recognized in cost of product sales or other income over the following 12 months | 4,600 | 4,600 | |||
Cash flow hedges | Cost of product sales | |||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings | |||||
Gain (loss) recognized in OCI | 5,343 | 1,866 | 4,196 | (706) | |
Gain (loss) reclassified from accumulated OCI into earnings | [1] | 3,193 | (265) | 4,943 | (759) |
Cash flow hedges | Other income/expense | |||||
Gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings | |||||
Gain (loss) recognized in OCI | 378 | 1 | 230 | (106) | |
Gain (loss) reclassified from accumulated OCI into earnings | [1] | $ 330 | $ (25) | $ 816 | $ (56) |
[1] | The ineffective portion was immaterial during the three and six months ended August 1, 2015 and August 2, 2014 and was recorded in net earnings and included in interest income/expense. |
Derivative Financial Instrume59
Derivative Financial Instruments (Details 4) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 01, 2015 | Aug. 02, 2014 | Aug. 01, 2015 | Aug. 02, 2014 | Jan. 31, 2015 | |
Other income/expense | |||||
Derivative instruments not designated as hedging instruments | |||||
Gain on foreign exchange currency contracts recognized in earnings before taxes | $ 2,860 | $ 3,984 | $ 2,159 | $ 1,195 | |
Gain on interest rate swaps recognized in earnings before taxes | 47 | $ 57 | $ 96 | $ 132 | |
Derivatives not designated as hedging instruments: | Euro | |||||
Derivative instruments not designated as hedging instruments | |||||
U.S. dollar forward contracts outstanding, maximum remaining maturity period (in months) | 12 months | ||||
Derivatives not designated as hedging instruments: | Canadian dollar | |||||
Derivative instruments not designated as hedging instruments | |||||
U.S. dollar forward contracts outstanding, maximum remaining maturity period (in months) | 7 months | ||||
Foreign exchange currency contracts | Derivatives not designated as hedging instruments: | Euro | |||||
Derivative instruments not designated as hedging instruments | |||||
U.S. dollar forward contracts outstanding | 81,900 | $ 81,900 | $ 59,300 | ||
Foreign exchange currency contracts | Derivatives not designated as hedging instruments: | Canadian dollar | |||||
Derivative instruments not designated as hedging instruments | |||||
U.S. dollar forward contracts outstanding | $ 14,300 | $ 14,300 | $ 19,900 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Aug. 26, 2015 | Aug. 01, 2015 | Aug. 02, 2014 | Aug. 01, 2015 | Aug. 02, 2014 |
Subsequent Events | |||||
Cash dividend announced on common stock (in dollars per share) | $ 0.225 | $ 0.225 | $ 0.45 | $ 0.45 | |
Dividend Declared | |||||
Subsequent Events | |||||
Cash dividend announced on common stock (in dollars per share) | $ 0.225 | ||||
Payment date of cash dividend | Sep. 25, 2015 | ||||
Record date of cash dividend | Sep. 9, 2015 |