PEMBROKE PINES, Fla., March 9 /PRNewswire-FirstCall/ -- Claire's Stores,
Inc. (NYSE: CLE) today announced financial results for the fourth quarter of
Fiscal 2006 and Fiscal 2006 in its entirety and provided guidance for Fiscal
2007.
Fourth Quarter Results
Results for the fourth quarter of Fiscal 2006, which ended January 28,
2006, were as follows: Income from continuing operations increased 18 percent
to $69.1 million from $58.7 million during the comparable period in Fiscal
2005, which ended January 29, 2005. (Fiscal 2006 reflects $5.7 million in
taxes associated with the repatriation of $95.0 million of foreign earnings.)
On a per share basis, diluted income from continuing operations during the
fourth quarter of Fiscal 2006 rose 17 percent to $0.69 per share compared to
$0.59 per share in Fiscal 2005. (Fiscal 2006 reflects a $0.06 per share charge
relating to the incremental taxes. Without this charge, diluted income from
continuing operations would have been $0.75 per share.) On a per share basis,
diluted net income during the fourth quarter of Fiscal 2006 rose 23 percent to
$0.69 per share compared to $0.56 per share in Fiscal 2005.
For the fourth quarter of Fiscal 2006, net sales rose five percent to
$414.7 million, compared with $395.9 million for the same period last year.
Comparable store sales for the fourth quarter of Fiscal 2006 increased six
percent, after achieving a five percent increase in the fourth quarter of
Fiscal 2005.
Fourth quarter comparable store sales results were as follows:
-- Claire's North America: positive mid single digits
-- Claire's International: positive low single digits
-- Icing by Claire's: positive high single digits
Commenting on fourth quarter results, Co-Chairman and Co-Chief Executive
Officer Bonnie Schaefer said, "Fiscal 2006 was a time of growth in Claire's
international division. Beyond increasing our store count, we began conducting
business in three new countries, namely Spain, Holland and Belgium. None of
these moves involved acquisitions. In each case, we secured new store sites
and built the stores from the ground up. This expansion into new markets will
continue during Fiscal 2007 when we expect to enter at least one new country,
while continuing to open new stores in countries where we already have a
presence."
She further noted that, "We have also continued to make progress from an
operational standpoint. Systems are being upgraded, training programs continue
to be rolled out for both management and store based staff, service levels are
being upgraded, and above all, merchandise is being managed to enhance its
appeal to our customers. On a full year basis, our Fiscal 2006 comparable
store sales performance in the international division rose from the prior
fiscal year and our objective is to sustain those positive comps."
Marla Schaefer, Co-Chairman and Co-Chief Executive Officer, stated that,
"In North America, we had another fourth quarter and full year of strong
comparable store sales growth at our Claire's and Icing by Claire's concepts.
This demonstrates our success at meeting the ever-changing needs of our
customers, tweens and teens as well as females of all ages. Interest in
jewelry remains high, but at the same time we have seen real growth in newer
categories such as licensed fragrances and cosmetics. We will continue to
evolve our offerings as styles and trends shift, as we view continuous change
as a key factor in our ongoing success.
"Following another year of record results, we are once again facing a high
hurdle in terms of absolute and comparable store sales growth. The projections
presented below are modest, but they must be viewed in context with the
outstanding results delivered over the past three years. We remain extremely
confident about our potential for continuous growth, and throughout Fiscal
2007 our primary focus will be on strengthening the organizational foundation
that will enable us to reach new levels of operating and financial success."
Fiscal 2006 Results
Fiscal 2006 net sales grew seven percent to approximately $1.37 billion
from approximately $1.28 billion in Fiscal 2005. Comparable store sales
increased six percent, compared with an increase of eight percent during
Fiscal 2005.
Income from continuing operations increased to $172.3 million or $1.73 per
diluted share, from $146.3 million or $1.47 per diluted share in Fiscal 2005,
an increase of 18 percent. Net income increased to $172.3 million or $1.73 per
diluted share, from $143.1 million or $1.44 per diluted share in Fiscal 2005,
an increase of 20 percent. Fiscal 2005 includes a $3.1 million charge, net of
tax, related to discontinued operations.
Store Count: End of the Fourth Fiscal Quarter:
January 28, 2006 January 29, 2005
Claire's North America 1,676 1,674
Claire's Europe 772 717
Icing by Claire's 430 445
Claire's Nippon 172 148
Total 3,050 2,984
Business Outlook for the First Quarter and Full Year - Fiscal 2007
First Quarter:
First quarter revenues are estimated to range between $314 and $318
million, an increase of four to five percent from the corresponding period in
Fiscal 2006. Comparable store sales are projected to rise by four to five
percent, following an increase of five percent in the first quarter of Fiscal
2006. Net income is projected to reach $30 to $32 million, or $0.30 to $0.32
per diluted share. For the first quarter of Fiscal 2006, net income was $29.7
million, or $0.30 per diluted share.
Full Year:
For Fiscal 2007 in its entirety, the Company is projecting that revenues
will grow by approximately six to seven percent to approximately $1.45 to
$1.47 billion. Comparable store sales are expected to grow by three to four
percent.
Gross margins are anticipated to increase by 10-20 basis points. SG&A is
projected to decrease as a percentage of sales, resulting in a 30-50 basis
point improvement.
Net income is projected to reach $190 to $195 million, or $1.96 to $2.01
on a diluted per share basis. This projection assumes that the diluted
weighted average number of shares outstanding will approximate 96.7 million
for Fiscal 2007.
To date, we have repurchased approximately 215,000 shares of common stock
at a total cost of approximately $6.5 million. Our objective is to complete
the balance of the buyback this fiscal year.
Conference Call Information
The Company will host its fourth quarter conference call on March 9, 2006,
at 10:00 a.m. (EST). The call in number is 1-210-795-9101 and the password is
"CLAIRES." A replay will be available through March 17, 2006. The replay
number is 203-369-1696 and the password is 25247. The conference call is also
being archived until March 17, 2006 on the Company's corporate website at
http://www.clairestores.com, and can be accessed by clicking on the
"Conference Calls" link located under "Financial Information."
Company Overview
Claire's Stores, Inc., is a leading international specialty retailer
offering value-priced costume jewelry and accessories to fashion-aware tweens,
teens and young adults through its two store concepts: Claire's and Icing by
Claire's. While the latter operates only in North America, Claire's operates
internationally. As of February 25, 2006, Claire's Stores, Inc. operated
approximately 2,900 stores in the United States, Canada, Puerto Rico, the
Virgin Islands, the United Kingdom, Ireland, France, Switzerland, Austria,
Germany, Spain, Holland and Belgium. Claire's Stores, Inc. operates through
its subsidiary, Claire's Nippon, Co., Ltd., 172 stores in Japan as a 50:50
joint venture with AEON, Co., Ltd. (fka JUSCO, Co. Ltd.), a $40 billion
specialty retailer headquartered in Japan. The Company also licenses 87 stores
in the Middle East and Turkey under a licensing and merchandising agreement
with Al Shaya Co., Ltd. and seven stores in South Africa under similar
agreements with The House of Busby Limited.
Forward-looking Statements
This press release contains "forward-looking statements" which represent
the Company's expectations or beliefs with respect to future events.
Statements that are not historical are considered forward-looking statements.
These forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
anticipated. Those factors include, without limitation: changes in consumer
preferences and consumer spending for pre-teen, teen and young adult apparel
and accessories; competition; general economic conditions such as inflation
and increased energy costs; general and political social conditions such as
war, political unrest and terrorism; natural disasters or severe weather
events; currency fluctuations and exchange rate adjustments; changes in laws;
uncertainties generally associated with the specialty retailing business;
disruptions in our supply of inventory; inability to increase comparable store
sales at recent historical rates; inability to design and implement new
information systems; delays in anticipated store openings or renovations; and
uncertainty that definitive financial results may differ from preliminary
financial results due to, among other things, final GAAP adjustments. These
and other applicable risks, cautionary statements and factors that could cause
actual results to differ from the Company's forward-looking statements are
included in the Company's filings with the SEC, specifically as described in
the Company's annual report on Form 10-K for the Fiscal year ended January 29,
2005. The Company undertakes no obligation to update or revise any forward-
looking statements to reflect subsequent events or circumstances. The
historical results contained in this press release are not necessarily
indicative of the future performance of the Company.
Use of Non-GAAP Financial Measures
Diluted income from continuing operations on a per share basis after
giving effect to the tax relating to the repatriation is a non-GAAP financial
measure relating to certain foreign earnings that were repatriated in Fiscal
2006. This amount represents a key measure used by management to evaluate its
operations. Management does not consider the repatriation of foreign earnings
to be a normal operating item and therefore excludes it from the evaluation of
the Company's operating performance. This amount should not be considered a
measure of financial condition or performance in isolation or as an
alternative to income from continuing operations or diluted income from
continuing operations per share as reported in the Company's Statements of
Income in accordance with GAAP, and may not be comparable to similarly titled
measures of other companies.
Additional Information:
Note: Other Claire's Stores, Inc. press releases, a corporate profile and
most recent 10-K and 10-Q reports are available via Claire's corporate
website: http://www.clairestores.com. For information about our products and
stores, please go to http://claires.com.
CLAIRE'S STORES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
THREE MONTHS ENDED
January 28, January 29,
2006 2005
Net sales $414,743,000 100.0% $395,891,000 100.0%
Cost of sales,
occupancy and buying
expenses 183,782,000 44.3% 181,012,000 45.7%
Gross profit 230,961,000 55.7% 214,879,000 54.3%
Other expenses
(income):
Selling, general
and administrative 114,833,000 27.7% 117,548,000 29.7%
Depreciation and
amortization 12,458,000 3.0% 11,841,000 3.0%
Interest and other
income (5,435,000) (1.3%) (2,079,000) (0.5%)
121,856,000 29.4% 127,310,000 32.2%
Income before income
taxes 109,105,000 26.3% 87,569,000 22.1%
Income taxes 40,049,000 9.7% 28,909,000 7.3%
Income from continuing
operations 69,056,000 16.7% 58,660,000 14.8%
Discontinued
operation:
Loss on disposal from
discontinued
operations, net of
tax of $0,
$1,865,000, $0 and
$1,865,000
respectively - (3,135,000)
Loss from
discontinued
operations - 0.0% (3,135,000) (0.8%)
Net income $69,056,000 16.7% $55,525,000 14.0%
Net income per share:
Basic:
Income from continuing
operations $0.70 $0.59
Loss on disposal of
discontinued
operation - (0.03)
Loss from
discontinued
operation - (0.03)
Net Income per share $0.70 $0.56
Diluted:
Income from continuing
operations $0.69 $0.59
Loss on disposal of
discontinued operation - (0.03)
Loss from
discontinued
operation - (0.03)
Net Income per share $0.69 $0.56
Weighted average number
of shares outstanding:
Basic 99,235,000 98,979,000
Diluted 99,749,000 99,323,000
TWELVE MONTHS ENDED
January 28, 2006 January 29, 2005
Net sales $1,369,752,000 100.0% $1,279,407,000 100.0%
Cost of sales, occupancy
and buying expenses 625,866,000 45.7% 587,687,000 45.9%
Gross profit 743,886,000 54.3% 691,720,000 54.1%
Other expenses (income):
Selling, general and
administrative 449,555,000 32.8% 431,060,000 33.7%
Depreciation and
amortization 48,900,000 3.6% 44,882,000 3.5%
Interest and other
income (14,240,000) (1.0%) (5,858,000) (0.5%)
484,215,000 35.4% 470,084,000 36.7%
Income before income
taxes 259,671,000 19.0% 221,636,000 17.3%
Income taxes 87,328,000 6.4% 75,377,000 5.9%
Income from continuing
operations 172,343,000 12.6% 146,259,000 11.4%
Discontinued operation:
Loss on disposal from
discontinued operations,
net of tax of $0,
$1,865,000, $0 and
$1,865,000 respectively - (3,135,000)
Loss from discontinued
operations - 0.0% (3,135,000) (0.2%)
Net income $172,343,000 12.6% $143,124,000 11.2%
Net income per share:
Basic:
Income from continuing
operations $1.74 $1.48
Loss on disposal of
discontinued operation - (0.03)
Loss from
discontinued
operation - (0.03)
Net Income per share $1.74 $1.45
Diluted:
Income from continuing
operations $1.73 $1.47
Loss on disposal of
discontinued operation - (0.03)
Loss from
discontinued
operation - (0.03)
Net Income per share $1.73 $1.44
Weighted average number of
shares outstanding:
Basic 99,106,000 98,937,000
Diluted 99,522,000 99,310,000
CLAIRE'S STORES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
January 28, January 29,
2006 2005
ASSETS
Current assets:
Cash and cash equivalents $431,122,000 $191,006,000
Investments - 134,613,000
Inventories 113,405,000 110,072,000
Prepaid expenses and other
current assets 53,480,000 57,635,000
Total current assets 598,007,000 493,326,000
Property and equipment:
Land and building 18,151,000 18,151,000
Furniture, fixtures and
equipment 252,346,000 238,022,000
Leasehold improvements 238,817,000 211,721,000
509,314,000 467,894,000
Less accumulated depreciation
and amortization (286,595,000) (263,368,000)
222,719,000 204,526,000
Intangible assets, net 56,175,000 52,474,000
Other assets 15,162,000 14,736,000
Goodwill 198,638,000 201,067,000
269,975,000 268,277,000
Total assets $1,090,701,000 $966,129,000
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Trade accounts payable $50,242,000 $42,325,000
Income taxes payable 36,708,000 30,600,000
Accrued expenses 93,812,000 94,013,000
Total current liabilities 180,762,000 166,938,000
Long-term liabilities:
Deferred tax liability 20,979,000 24,293,000
Deferred rent expense 21,959,000 19,211,000
Total long-term liabilities 42,938,000 43,504,000
Stockholders' equity:
Class A stock - par value $0.05
per share 245,000 256,000
Common stock - par value $0.05
per share 4,729,000 4,693,000
Additional paid-in capital 62,004,000 50,477,000
Unearned compensation- stock
grants (2,690,000) -
Accumulated other comprehensive
income, net of tax 21,036,000 28,041,000
Retained earnings 781,677,000 672,220,000
Total stockholders' equity 867,001,000 755,687,000
Total liabilities and
stockholders' equity $1,090,701,000 $966,129,000
SOURCE Claire's Stores, Inc.
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Related links:
http://www.clairestores.com
Company News On-Call:
http://www.prnewswire.com/comp/174913.html
CONTACT:
Marisa F. Jacobs, Vice President of Corporate
Communications and Investor Relations, Claire's Stores, Inc.,
+1-212-594-3127, Fax: +1-212-244-4237, marisa.jacobs@claires.com
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