Guess?, Inc. (NYSE: GES – News) today reported financial results for the fourth quarter and fiscal year ended December 31, 2003.
Fourth Quarter Results
For the fourth quarter of 2003, the Company reported net earnings of $11.8 million, or diluted earnings of $0.27 per share, compared to a net loss of $4.6 million, or a diluted loss of $0.11 per share, for the fourth quarter of 2002. The 2003 fourth quarter results include impairment charges of $1.6 million, or $0.9 million net of tax, or $0.02 per diluted share, of which $1.2 million relate to the Company's fourth quarter decision to close its 10 underperforming kids' stores. The 2002 fourth quarter results include restructuring, impairment and severance charges of $8.5 million, or $6.1 million net of tax, or $0.14 per diluted share, associated with various actions the Company took to lower future operating costs.
Carlos Alberini, President and Chief Operating Officer, commented, ''Guess? capped off 2003 with an excellent performance in the fourth quarter. Results were driven by higher sales and a significant gross margin increase in the period coupled with continued cost control, which resulted in an SG&A rate improvement of over 500 basis points. Our retail segment generated the greatest gains, with operating income up by $15.4 million, or 160.4%, a testament to the leverage of our retail business model and its significant opportunity for growth. We have entered 2004 with an improved balance sheet. Cash and restricted cash at year-end 2003 totaled $71.7 million, inventories were down 12.7% from a year ago, and total debt was 16.6% lower than the prior year-end. We have strong business momentum and look forward to building on our progress in the future.''
Total net revenue for the fourth quarter of 2003 increased 19.1% to $199.3 million from $167.4 million in the fourth quarter of 2002. The Company's retail stores, including those in Canada, generated revenues of $154.2 million in the 2003 fourth quarter, a 17.7% increase from $130.9 million reported in the same period a year ago. Comparable store sales increased 11.7% during the fourth quarter of 2003 from the year-ago period. Net revenue from the Company's wholesale segment increased 29.7% to $34.2 million in the fourth quarter of 2003 from $26.4 million in the year-ago period. Licensing segment net revenue increased 8.3% to $10.9 million in the 2003 fourth quarter from $10.1 million in the fourth quarter last year.
Full Year 2003 Results
For the full year ended December 31, 2003, the Company reported net earnings of $7.3 million, or diluted earnings of $0.17 per share, versus a net loss of $11.3 million, or a diluted loss of $0.26 per share, in the comparable 2002 period. The 2003 results include impairment and severance charges of $2.4 million, or $1.4 million net of tax, or $0.03 per diluted share. The 2002 results include litigation settlement proceeds of $4.3 million, or $2.9 million net of tax, or $0.07 per diluted share, and restructuring, impairment and severance charges of $9.2 million, or $6.2 million net of tax, or $0.14 per diluted share.
Total net revenue for 2003 increased 9.2% to $636.6 million from $583.1 million in 2002. The Company's retail stores, including those in Canada, generated revenue of $447.7 million for 2003, an increase of 16.4% from $384.5 million for last year. Comparable store sales increased 9.3% for the 2003 year. Net revenue from the Company's wholesale segment decreased 6.6% to $149.1 million in 2003 from $159.6 million in 2002. Licensing segment net revenue for 2003 increased 1.8% to $39.8 million from $39.0 million for the prior year.