PEMBROKE PINES, Fla., March 10 /PRNewswire-FirstCall/ -- Claire's Stores,
Inc. (NYSE: CLE) today announced financial results for the fourth quarter of
Fiscal 2005 and provided guidance with respect to Fiscal 2006.
Fourth Quarter
Results for the fourth quarter of Fiscal 2005, which ended January 29,
2005, were as follows: Income from continuing operations increased 13 percent
to $58.7 million from $52.0 million during the comparable period in Fiscal
2004, which ended January 31, 2004. The latter amount includes an after-tax
charge of $5.7 million attributable to the retirement package granted to the
Company's Chairman Emeritus. On a per share basis, diluted income from
continuing operations rose 11 percent to $0.59. This compares to $0.53 per
share in Fiscal 2004's fourth quarter, which amount includes an after-tax
retirement charge of approximately $0.06 per share. On a per share basis,
diluted net income during the fourth quarter of Fiscal 2005 reached $0.56 per
share.
For the final quarter of Fiscal 2005, net sales increased nine percent to
a record $395.9 million, compared with $364.0 million for the same period last
year. Comparable store sales for the fourth quarter of Fiscal 2005 increased
five percent, after achieving a seven percent increase in the fourth quarter
of Fiscal 2004.
Fourth quarter comparable store sales by brand were as follows:
* Claire's North America: positive mid single digits
* Claire's International: positive high single digits
* Icing by Claire's: positive high single digits
The fourth quarter Cost of sales, occupancy and buying expense line item
of the Company's income statement includes a non-cash accrual of $1.5 million
(or $0.01 per diluted share). This amount is being recorded in response to
our review of certain lease accounting policies and their application under
GAAP, as set forth by the Securities and Exchange Commission on February 7,
2005 in their letter to the AICPA.
Commenting on fourth quarter results, Co-Chairman and Co-Chief Executive
Officer Marla Schaefer said, "We are delighted that we have once again been
able to deliver record results for the fourth quarter and full fiscal year.
During the first half of the year, our business was exceptionally strong.
However, the back half of the year became more challenging as holiday shopping
patterns varied from prior years. When it became apparent that we would not
meet our internal projections we moved quickly and decisively to reduce
merchandise purchases, to control labor costs and to clear out excess
inventory. As a result, we ended the year well positioned for the spring
selling season.
"Our fourth quarter results also include a charge associated with a
discontinued operation. This reflects a settlement of litigation stemming
from the sale of Lux Corporation, d/b/a Mr. Rags, in May 2002.
"In Fiscal 2006, we will be facing very difficult comparisons, with
respect to comparable store sales. Consequently our Fiscal 2006 projections
are more modest than last year. However, we remain confident in our ability
to continue driving revenues and net income, both through increased business
at our existing stores and through store expansion."
Bonnie Schaefer, Co-Chairman and Co-Chief Executive Officer, made the
following comments. "The comparable store sales growth reported by our
international division for the fourth quarter represents our best performance
of the year, illustrating a course of steady improvement. Furthermore, growth
in the positive high single digits illustrates a dramatic turnaround from last
year's fourth quarter, when our comparable store sales in the international
division declined in the mid single digits.
"Improved international performance was one of our major objectives for
Fiscal 2005, and accordingly, a great deal of effort was devoted to this
activity. We have spoken repeatedly about the exportation of North American
best practices. The Claire's brand is widely recognized and carries
significant value among our core customers. Our objective is for the shopping
experience abroad to mirror that in North America, in terms of providing our
customers with a shopping experience that is fun and appealing. We do this by
offering an unparalleled selection of costume jewelry and accessories at
reasonable prices in a visually exciting setting. Our work is not complete,
but we believe that Fiscal 2005 was a time in which great strides were made in
terms of revitalizing our stores in Europe. We are excited about our planned
expansion for Fiscal 2006, especially our entrance into two new countries, and
look forward to continuing improvements in the performance of our
international division."
Fiscal 2005 Results
Fiscal 2005, net sales grew 13 percent to approximately $1.3 billion from
approximately $1.1 billion in Fiscal 2004. Comparable store sales increased
eight percent, compared with an increase of seven percent during Fiscal 2004.
Income from continuing operations increased to $146.3 million or $1.47 per
diluted share, from $115.0 million or $1.17 per diluted share in Fiscal 2004,
an increase of 27 percent, or 26% on a diluted per share basis. Net income
increased to $143.1 million or $1.44 per diluted share, from $115.0 million or
$1.17 per diluted share in Fiscal 2004, an increase of 24 percent, or 23% on a
diluted per share basis.
Store Count: End of the Fourth Fiscal Quarter:
January 29, 2005 January 31, 2004
Claire's North America 1,674 1,649
Claire's Europe 717 700
Icing by Claire's 445 463
Claire's Nippon 148 123
Total 2,984 2,935
Business Outlook for the First Quarter and Full Year - Fiscal 2006
First Quarter:
First quarter revenues are estimated to range between $299 and $304
million, an increase of six to eight percent. Comparable store sales are
projected to rise by three to five percent, following an increase of 11
percent in the first quarter of Fiscal 2005. Net income is projected to reach
$25 to $28 million, or $0.25 to $0.28 per diluted share. For the first
quarter of Fiscal 2005, net income was $27.7 million, or $0.28 per diluted
share.
Full Year:
For Fiscal 2006 in its entirety, the Company is projecting that revenues
will grow by approximately five to seven percent to approximately $1.34
billion to $1.37 billion. Comparable store sales are expected to grow by two
to four percent.
Gross margins are anticipated to improve by 15-20 basis points. SG&A is
projected to decrease as a percentage of sales leading to a 40-60 basis point
improvement.
Income from continuing operations is projected to reach $152 million to
$163 million, or $1.54 to $1.65 on a diluted per share basis.
Conference Call Information
The Company will host its fourth quarter conference call on March 10,
2005, at 10:00 a.m. (EST). The call in number is 210-795-9101 and the
password is "Claires." A replay will be available through March 18, 2005. The
replay number is 402-998-0463 and the password is 25247. The conference call
is also being archived until March 18, 2005 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 26, 2005, Claire's Stores, Inc. operated
approximately 2,840 stores in the United States, Canada, Puerto Rico, the
Virgin Islands, the United Kingdom, Ireland, France, Switzerland, Austria and
Germany. Claire's Stores, Inc. also operates through its subsidiary, Claire's
Nippon, Co., Ltd., 150 stores in Japan as a 50:50 joint venture with AEON,
Co., Ltd. (fka JUSCO, Co. Ltd.), a $25 billion specialty retailer
headquartered in Japan. The Company also operates 57 stores in the Middle
East and Turkey under a licensing and merchandising agreement with Al Shaya
Co., Ltd. and four 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. 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, political and social conditions such as war,
political unrest and terrorism; natural disasters; currency fluctuations and
exchange rate adjustments; changes in laws; uncertainties generally associated
with the specialty retailing business; disruptions in our supply of inventory;
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 31,
2004. 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.
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://www.claires.com.
CLAIRE'S STORES, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
THREE MONTHS ENDED
January 29, 2005 January 31, 2004
Net sales $395,891,000 100.0% $363,983,000 100.0%
Cost of sales,
occupancy and buying
expenses 181,012,000 45.7% 157,297,000 43.2%
Gross profit 214,879,000 54.3% 206,686,000 56.8%
Other expenses
(income):
Selling, general and
administrative 117,502,000 29.7% 115,708,000 31.8%
Depreciation and
amortization 11,841,000 3.0% 10,998,000 3.0%
Interest expense 46,000 0.0% 553,000 0.2%
Interest and other
income (2,079,000) (0.5%) (1,152,000) (0.3%)
127,310,000 32.2% 126,107,000 34.6%
Income before income
taxes 87,569,000 22.1% 80,579,000 22.1%
Income taxes 28,909,000 7.3% 28,540,000 7.8%
Income from continuing
operations 58,660,000 14.8% 52,039,000 14.3%
Discontinued operation:
(Loss) on disposal
from discontinued
operations, net of
tax of $1,865,000,
0, $1,865,000 and 0
respectively (3,135,000) -
Gain (Loss) from
discontinued
operations (3,135,000) (0.8%) - 0.0%
Net income $55,525,000 14.0% $52,039,000 14.3%
Net income per share:
Basic:
Income from continuing
operations $0.59 $0.53
Loss from disposal of
discontinued
operation (0.03) -
Gain (Loss)
from discontinued
operation (0.03) -
Net Income per share $0.56 $0.53
Diluted:
Income from
continuing
operations $0.59 $0.53
Loss from disposal of
discontinued
operation (0.03) -
Gain (Loss)
from discontinued
operation (0.03) -
Net Income per share $0.56 $0.53
Weighted average number of
shares outstanding:
Basic 98,979,000 98,421,000
Diluted 99,323,000 98,926,000
TWELVE MONTHS ENDED
January 29, 2005 January 31, 2004
Net sales $1,279,407,000 100.0% $1,132,834,000 100.0%
Cost of sales, occupancy
and buying expenses 587,687,000 45.9% 524,455,000 46.3%
Gross profit 691,720,000 54.1% 608,379,000 53.7%
Other expenses (income):
Selling, general and
administrative 430,867,000 33.7% 394,152,000 34.8%
Depreciation and
amortization 44,882,000 3.5% 41,451,000 3.7%
Interest expense 193,000 0.0% 2,561,000 0.2%
Interest and other
income (5,858,000) (0.5%) (4,207,000) (0.4%)
470,084,000 36.7% 433,957,000 38.3%
Income before income
taxes 221,636,000 17.3% 174,422,000 15.4%
Income taxes 75,377,000 5.9% 59,384,000 5.2%
Income from continuing
operations 146,259,000 11.4% 115,038,000 10.2%
Discontinued operation:
(Loss) on disposal from
discontinued operations,
net of tax of
$1,865,000, 0,
$1,865,000 and 0
respectively (3,135,000) -
Gain (Loss) from
discontinued operations (3,135,000) (0.2%) - 0.0%
Net income $143,124,000 11.2% $115,038,000 10.2%
Net income per share:
Basic:
Income from continuing
operations $1.48 $1.17
Loss from disposal of
discontinued operation (0.03) -
Gain (Loss) from
discontinued
operation (0.03) -
Net Income per share $1.45 $1.17
Diluted:
Income from continuing
operations $1.47 $1.17
Loss from disposal of
discontinued operation (0.03) -
Gain (Loss) from
discontinued
operation (0.03) -
Net Income per share $1.44 $1.17
Weighted average number of
shares outstanding:
Basic 98,937,000 97,955,000
Diluted 99,310,000 98,440,000
CLAIRE'S STORES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
January 29, 2005 January 31, 2004
ASSETS
Current assets:
Cash and cash equivalents $325,619,000 $224,630,000
Inventories 110,072,000 92,498,000
Prepaid expenses and other
current assets 57,635,000 42,895,000
Total current assets 493,326,000 360,023,000
Property and equipment:
Land and building 18,151,000 18,151,000
Furniture, fixtures and equipment 238,022,000 225,425,000
Leasehold improvements 211,721,000 186,760,000
467,894,000 430,336,000
Less accumulated depreciation and
amortization (263,368,000) (244,484,000)
204,526,000 185,852,000
Intangible assets, net 52,474,000 43,896,000
Other assets 14,736,000 16,351,000
Goodwill 201,067,000 199,802,000
268,277,000 260,049,000
Total Assets $966,129,000 $805,924,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $41,994,000 $37,754,000
Income taxes payable 30,600,000 29,148,000
Accrued expenses 94,344,000 76,424,000
Total current liabilities 166,938,000 143,326,000
Long-term liabilities:
Deferred tax liability 24,293,000 12,148,000
Deferred rent expense 19,211,000 18,000,000
Total long-term liabilities 43,504,000 30,148,000
Stockholders' equity:
Class A stock - par value $0.05
per share 256,000 261,000
Common stock - par value $0.05
per share 4,693,000 4,685,000
Additional paid-in capital 50,477,000 49,392,000
Accumulated other comprehensive
income, net of tax 28,041,000 20,109,000
Retained earnings 672,220,000 558,003,000
Total Stockholders' Equity 755,687,000 632,450,000
Total Liabilities and
Stockholders' Equity $966,129,000 $805,924,000
SOURCE Claire's Stores, Inc.
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Related links:
http://www.clairestores.com
http://www.claires.com
Company News On-Call:
http://www.prnewswire.com/comp/174913.html
CONTACT:
Marisa F. Jacobs, Vice President of Corporate
Communications and Investor Relations, +1-212-594-3127, Fax:
+1-212-244-4237, marisa.jacobs@claires.com
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