Exhibit 99.1
GUESS?, INC. REPORTS FOURTH QUARTER AND FULL YEAR 2004 FINANCIAL RESULTS
* 4Q EPS of $0.33 Versus $0.27 in 4Q Last Year, a 26% Increase in Net Earnings
* Full Year 2004 EPS of $0.66 Versus $0.17 in 2003
LOS ANGELES, Feb. 16 /PRNewswire-FirstCall/ -- Guess?, Inc. (NYSE: GES)
today reported financial results for the fourth quarter and fiscal year ended
December 31, 2004.
Fourth Quarter Results
For the fourth quarter of 2004, the Company reported net earnings of $14.9
million, or diluted earnings of $0.33 per share, compared to net earnings of
$11.8 million, or diluted earnings of $0.27 per share, for the fourth quarter of
2003. The 2003 fourth quarter results include impairment charges of $1.6 million
($0.9 million net of tax), or $0.02 per diluted share, of which $1.2 million
related to the Company's decision to close its 10 underperforming kids' stores.
Carlos Alberini, President and Chief Operating Officer, commented, "The
fourth quarter capped off a strong year for Guess?. Results for the quarter
reflect sales and margin growth, including improved wholesale performance and a
higher licensing contribution. As anticipated, retail sales growth during the
quarter moderated from the pace seen earlier in the year, and we experienced
higher expenses in this segment due to the launch of our new concepts, Marciano
and Guess? Accessories. We continue to remain focused on enhancing the strength
of our balance sheet and finished the year with significantly higher cash and
cash equivalents, lower debt and reduced inventory levels. We look forward to
building on our momentum in 2005 as we pursue a number of exciting growth
initiatives."
"Our balance sheet has continued to improve with cash and restricted cash at
year-end 2004 totaling $109.7 million versus $71.7 million a year ago,
inventories down 1.4% from a year ago in spite of store growth, and a decrease
in total debt of over $13 million from the prior year-end," Mr. Alberini said.
Total net revenue for the fourth quarter of 2004 increased 12.4% to $224.0
million from $199.3 million in the fourth quarter of 2003. The Company's retail
stores, including those in Canada, generated revenues of $172.0 million in the
2004 fourth quarter, an 11.5% increase from $154.2 million reported in the same
period a year ago. Comparable store sales increased 4.4% during the fourth
quarter of 2004 from the year-ago period. Net revenue from the Company's
wholesale segment was $39.6 million in the fourth quarter of 2004, compared to
$34.2 million in the year-ago period. Licensing segment net revenue increased
13.7% to $12.4 million in the 2004 fourth quarter from $10.9 million in the
fourth quarter last year.
Full Year 2004 Results
For the full year ended December 31, 2004, the Company reported net earnings
increased to $29.6 million, or diluted earnings of $0.66 per share, versus net
earnings of $7.3 million, or diluted earnings of $0.17 per share, in the
comparable 2003 period. The 2003 results include impairment and severance
charges of $2.4 million, ($1.4 million net of tax), or $0.03 per diluted share.
Total net revenue for 2004 increased 14.6% to $729.3 million from $636.6
million in 2003. The Company's retail stores, including those in Canada,
generated revenue of $518.9 million for 2004, an increase of 15.9% from $447.7
million for last year. Comparable store sales increased 9.9% for the 2004 year.
Net revenue from the Company's wholesale segment increased 9.4% to $163.2
million in 2004, from $149.1 million in 2003. Licensing segment net revenue for
2004 increased 18.8% to $47.2 million from $39.8 million for the prior year.
The Company will hold a conference call at 10:30 am (ET) on February 16,
2005 to discuss the news announced in this press release. A live webcast of the
conference call will be accessible at www.guess.com via the "Investor's Info"
link from the "Guess, Inc." section of the site. The webcast will be archived on
the website for 30 days.
Guess?, Inc. designs, markets, distributes and licenses one of the world's
leading lifestyle collections of contemporary apparel, accessories and related
consumer products.
Except for historical information contained herein, certain matters
discussed in this press release are forward-looking statements that are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are only expectations, and
involve known and unknown risks and uncertainties, which may cause actual
results in future periods and other future events to differ materially from what
is currently anticipated. Factors which may cause actual results in future
periods to differ from current expectations include, among other things, the
continued availability of sufficient working capital, the successful integration
of new stores into existing operations, the continued desirability and customer
acceptance of existing and future product lines (including licensed product
lines), possible cancellations of wholesale orders, the success of competitive
products, and the availability of adequate sources of capital. In addition to
these factors, the economic and other factors identified in the Company's most
recent annual report on Form 10-K for the fiscal year ended December 31, 2003
including but not limited to the risk factors discussed therein, could affect
the forward-looking statements contained herein and in the Company's other
public documents.
For further information please contact: Carlos Alberini, President & Chief
Operating Officer, +1-213-765-3582; or Frederick G. Silny, SVP & Chief Financial
Officer, +1-213-765-3289, both of Guess?, Inc.; or Wendi Kopsick of Kekst and
Company, +1-212-521-4800, for Guess?, Inc.
Guess?, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three Months Ended
-------------------------------------------------------------
December 31, December 31,
2004 2003
----------------------------- -----------------------------
$ % $ %
------------- ------------- ------------- -------------
Net revenue
Product sales $ 211,573 94.5% $ 188,371 94.5%
Net royalties 12,410 5.5% 10,914 5.5%
223,983 100.0% 199,285 100.0%
Cost of product sales 135,573 60.5% 123,062 61.8%
Gross profit 88,410 39.5% 76,223 38.2%
Selling, general and
administrative expenses 62,264 27.8% 52,366 26.2%
Restructuring, impairment
and severance charges -- -- 1,579 0.8%
Earnings from operations 26,146 11.7% 22,278 11.2%
Other (income) expense:
Interest expense 1,293 0.6% 1,595 0.8%
Interest Income (275) (0.1)% (34) --
Other, net (265) (0.1)% -- --
Earnings before income
taxes 25,393 11.3% 20,717 10.4%
Income taxes 10,540 4.7% 8,910 4.5%
Net earnings $ 14,853 6.6% $ 11,807 5.9%
Net earnings per share:
Basic $ 0.34 $ 0.27
Diluted $ 0.33 $ 0.27
Weighted number of shares outstanding:
Basic 44,169 43,567
Diluted 44,622 44,149
Year Ended
-------------------------------------------------------------
December 31, December 31,
2004 2003
----------------------------- -----------------------------
$ % $ %
------------- ------------- ------------- -------------
Net revenue
Product sales $ 682,020 93.5% $ 596,806 93.8%
Net royalties 47,242 6.5% 39,779 6.2%
729,262 100.0% 636,585 100.0%
Cost of product sales 455,278 62.4% 416,430 65.4%
Gross profit 273,984 37.6% 220,155 34.6%
Selling, general and
administrative expenses 218,502 30.0% 197,130 31.0%
Restructuring, impairment
and severance charges -- -- 2,425 0.4%
Earnings from operations 55,482 7.6% 20,600 3.2%
Other (income) expense:
Interest expense 5,653 0.7% 7,974 1.2%
Interest Income (619) (0.1)% (134) --
Other, net (265) -- (26) --
Earnings before income
taxes 50,713 7.0% 12,786 2.0%
Income taxes 21,147 2.9% 5,500 0.9%
Net earnings $ 29,566 4.1% $ 7,286 1.1%
Net earnings per share:
Basic $ 0.67 $ 0.17
Diluted $ 0.66 $ 0.17
Weighted number of shares outstanding:
Basic 44,010 43,279
Diluted 44,544 43,558
Guess?, Inc. and Subsidiaries
Consolidated Segment Data
(in thousands)
(Unaudited)
Three Months Ended Year Ended
--------------------------- ---------------------------
Dec. 31 Dec. 31 Dec. 31 Dec. 31
2004 2003 2004 2003
------------ ------------ ------------ ------------
Net revenue:
Retail operations $ 171,950 $ 154,178 $ 518,855 $ 447,693
Wholesale operations 39,623 34,193 163,165 149,113
Licensing operations 12,410 10,914 47,242 39,779
$ 223,983 $ 199,285 $ 729,262 $ 636,585
Earnings (loss) from operations:
Retail operations $ 24,177 $ 24,945 $ 47,788 $ 32,370
Wholesale operations (493) (3,287) 2,183 (8,976)
Licensing operations 9,544 9,106 37,722 32,281
Corporate overhead (7,082) (8,486) (32,211) (35,075)
$ 26,146 $ 22,278 $ 55,482 $ 20,600
Guess?, Inc. and Subsidiaries
Selected Condensed Consolidated Balance Sheet Data
(in thousands)
(Unaudited)
December 31, December 31,
2004 2003
------------ ------------
ASSETS
Cash and cash equivalents $ 106,003 $ 67,163
Restricted cash 3,660 4,509
Receivables, net 53,915 32,602
Inventories, net 82,329 83,530
Other current assets 25,116 22,840
Property and equipment, net 113,944 114,403
Other assets 39,337 37,718
Total Assets $ 424,304 $ 362,765
LIABILITIES AND STOCKHOLDERS' EQUITY
Current installments of notes payable
and long-term debt $ 13,430 $ 13,931
Other current liabilities 119,369 96,944
Notes payable and long-term debt,
excluding current installments 41,396 54,161
Other liabilities 29,532 14,947
Stockholders' equity 220,577 182,782
Total Liabilities and Stockholders'
Equity $ 424,304 $ 362,765
Guess?, Inc. and Subsidiaries
Condensed Consolidated Cash Flow Data
(in thousands)
(Unaudited)
Year Ended
---------------------------
December 31, December 31,
2004 2003
------------ ------------
Net cash provided by operating
activities $ 74,103 $ 62,474
Net cash used in investing activities (26,597) (18,384)
Net cash used in financing activities (8,813) (9,175)
Effect of exchange rates on cash 147 495
Net increase in cash and cash
equivalents 38,840 35,410
Cash and cash equivalents at the
beginning of the year 67,163 31,753
Cash and cash equivalents at the end
of the period $ 106,003 $ 67,163
Supplemental information:
Depreciation and amortization $ 35,442 $ 34,944
Rent 63,352 59,151
Guess?, Inc. and Subsidiaries
Retail Store Data
(Unaudited)
Year Ended
---------------------------
December 31, December 31,
2004 2003
------------ ------------
Number of stores at the beginning of
the year 265 249
Store openings 34 20
Store closures (12) (4)
Number of stores at the end of the
period 287 265
Total store square footage at the end
of the period 1,460,000 1,372,000
SOURCE Guess?, Inc.
-0- 02/16/2005
/CONTACT: Carlos Alberini, President & Chief Operating Officer,
+1-213-765-3582; or Frederick G. Silny, SVP & Chief Financial Officer,
+1-213-765-3289, both of Guess?, Inc.; or Wendi Kopsick of Kekst and Company,
+1-212-521-4800, for Guess?, Inc./
/Web site: http://www.guess.com /