Guess?, Inc. 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.