Fiscal 2007 Sales Increase Eight Percent
Diluted EPS Increases 35% for the Fourth Quarter and 13% for the Full
Fiscal Year
French Key Money Accounting Issue Resolved
PEMBROKE PINES, Fla., April 18 /PRNewswire-FirstCall/ -- Claire's
Stores, Inc. (NYSE: CLE) today announced financial results for the fourth
quarter of Fiscal 2007 and Fiscal 2007 in its entirety. The Company also
reported the resolution of the French key money accounting issue which
delayed the completion of its Fiscal 2007 audit.
Fourth Quarter Results
Results for the fourth quarter of Fiscal 2007, which ended February 3,
2007, were as follows: Net income increased 25 percent to $86.5 million
from $69.1 million during the comparable period in Fiscal 2006, which ended
January 28, 2006. On a per share basis, diluted net income during the
fourth quarter of Fiscal 2007 rose 35 percent to $0.93 per share compared
to $0.69 per share in Fiscal 2006 reflecting, in part, the impact of the
Company's Fiscal 2007 stock buyback. The fourth quarter results for Fiscal
2006 include $5.7 million in taxes, or $0.06 per diluted share, associated
with the repatriation of $95 million of foreign earnings.
For the fourth quarter of Fiscal 2007, net sales rose 14 percent to
$472.3 million, compared with $414.7 million for the same period last year.
Comparable store sales for the fourth quarter of Fiscal 2007 increased one
percent, after achieving a six percent increase in the fourth quarter of
Fiscal 2006.
Fourth quarter comparable store sales results were as follows:
* Claire's North America: positive low single digits
* Claire's International: negative low single digits
* Icing by Claire's: negative low single digits
Commenting on fourth quarter results, Marla Schaefer, Co-Chairman and
Co-Chief Executive Officer, stated that, "In North America, the fourth
quarter exhibited a pattern that has now repeated itself for the past few
years. Sales picked up over the long Thanksgiving weekend and then slowed
until shortly before Christmas with customers waiting until then to buy the
items we are so well known for, such as stocking stuffers and holiday
accessories. Then, in the weeks immediately following Christmas, they come
back to our stores to take advantage of January sales, see the early
introduction of new spring merchandise and to redeem gift cards. The
improvement in January's North American comparable store sales, compared to
the lower results in November and December, bore this out."
Co-Chairman and Co-Chief Executive Officer Bonnie Schaefer said,
"During the fourth quarter of Fiscal 2007, our European business continued
to face many of the same issues that have impacted results throughout the
year, which we have identified and continue to address. We have begun a
small test of our new point of sale (POS) equipment in the United Kingdom
as well as in North America, with an expanded rollout taking place
throughout the year. Our pricing initiatives throughout continental Europe
are proceeding on track and as newly priced merchandise is being introduced
into our stores, we are seeing strong customer acceptance. We anticipate
further improvements in this area throughout Fiscal 2008."
Fiscal 2007 Results
Fiscal 2007 net sales grew eight percent to approximately $1.48 billion
from approximately $1.37 billion in Fiscal 2006. Comparable store sales
increased one percent, compared with an increase of six percent during
Fiscal 2006.
Net income in Fiscal 2007 increased 10 percent to $188.8 million from
$172.3 million. On a diluted per share basis, net income for Fiscal 2007
increased 13 percent to $1.96 from $1.73, reflecting, in part, the impact
of the Company's Fiscal 2007 stock buyback.
Fiscal 2007 results were impacted by the settlement of certain
multi-year foreign and domestic income tax audits which resulted in a net
tax benefit of approximately $5.3 million, or $0.06 per diluted share.
Store Count: End of the Fourth Fiscal Quarter
February 3, 2007 January 28, 2006
Claire's North America 1,691 1,676
Claire's Europe 859 772
Icing by Claire's 442 430
Claire's Nippon 193 172
Total 3,185 3,050
Resolution of the French Key Money Accounting Issue
On March 13, 2007, the Company announced that the release of its fourth
quarter and full year financial results for Fiscal 2007 would be delayed
due to an unresolved issue relating to the accounting treatment of key
money paid for lease rights for the Company's stores in France and whether
this key money should be considered an intangible asset with an indefinite
life, in accordance with the Company's current accounting practices, or as
a direct cost of the related leases. If key money is considered a direct
cost of the leases, amortization of those costs would have been required
and the Company would record a non-cash amortization charge and
consequently reduce net income and diluted earnings per share.
The Company has been working with the Securities and Exchange
Commission (the "SEC") to obtain pre-clearance of its accounting treatment
of this key money. On Thursday, April 12, 2007, the SEC and the Company
completed their discussions and agreed upon accounting models which,
although different from the Company's current approach, will not result in
amortization charges for Fiscal 2007. The Company now expects to file its
Annual Report on Form 10-K, for the Fiscal Year ended February 3, 2007, on
or before April 19, 2007.
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; uncertainty that definitive
financial results may differ from preliminary financial results due to,
among other things, final GAAP adjustments and other changes to comply with
applicable laws, rules and regulations; the reactions of the Company's
customers and suppliers to the transaction; and diversion of management
time on merger-related issues. 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 28, 2006. 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.
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 adult females 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 April 7, 2007, Claire's
Stores, Inc. operated approximately 3,000 stores in the United States,
Canada, Puerto Rico, the Virgin Islands, the United Kingdom, Ireland,
France, Switzerland, Austria, Germany, Spain, Portugal, Belgium and the
Netherlands. Claire's Stores, Inc. operates through its subsidiary,
Claire's Nippon, Co., Ltd., approximately 195 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
approximately 135 stores in the Middle East, Turkey and Russia under a
licensing and merchandising agreement with Al Shaya Co., Ltd. and eight
stores in South Africa under similar agreements with The House of Busby
Limited.
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
February 3, 2007 January 28, 2006
Net sales $472,307,000 100.0% $414,743,000 100.0%
Cost of sales,
occupancy and buying
expenses 211,106,000 44.7% 183,782,000 44.3%
Gross profit 261,201,000 55.3% 230,961,000 55.7%
Other expenses
(income):
Selling, general
and
administrative 133,452,000 28.3% 114,833,000 27.7%
Depreciation and
amortization 15,452,000 3.3% 12,458,000 3.0%
Interest and other
income (4,996,000) (1.1%) (5,435,000) (1.3%)
143,908,000 30.5% 121,856,000 29.4%
Income before income
taxes 117,293,000 24.8% 109,105,000 26.3%
Income taxes 30,821,000 6.5% 40,049,000 9.7%
Net income $86,472,000 18.3% $69,056,000 16.7%
Net income per share:
Basic:
Net Income per share $0.93 $0.70
Diluted:
Net Income per share $0.93 $0.69
Weighted average
number of shares
outstanding:
Basic 92,934,000 99,235,000
Diluted 93,166,000 99,749,000
TWELVE MONTHS ENDED
February 3, 2007 January 28, 2006
Net sales $1,480,987,000 100.0% $1,369,752,000 100.0%
Cost of sales, occupancy
and buying expenses 691,646,000 46.7% 625,866,000 45.7%
Gross profit 789,341,000 53.3% 743,886,000 54.3%
Other expenses (income):
Selling, general and
administrative 482,097,000 32.6% 449,555,000 32.8%
Depreciation and
amortization 56,771,000 3.8% 48,900,000 3.6%
Interest and other
income (18,177,000) (1.2%) (14,240,000) (1.0%)
520,691,000 35.2% 484,215,000 35.4%
Income before income
taxes 268,650,000 18.1% 259,671,000 19.0%
Income taxes 79,888,000 5.4% 87,328,000 6.4%
Net income $188,762,000 12.7% $172,343,000 12.6%
Net income per share:
Basic:
Net Income per share $1.97 $1.74
Diluted:
Net Income per share $1.96 $1.73
Weighted average number of
shares outstanding:
Basic 95,959,000 99,106,000
Diluted 96,231,000 99,522,000
CLAIRE'S STORES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
February 3, 2007 January 28, 2006
ASSETS
Current assets:
Cash and cash equivalents $340,877,000 $431,122,000
Inventories 121,119,000 113,405,000
Prepaid expenses 35,565,000 17,738,000
Other current assets 41,081,000 35,742,000
Total current assets 538,642,000 598,007,000
Property and equipment:
Land and building 17,350,000 18,151,000
Furniture, fixtures and equipment 283,556,000 252,346,000
Leasehold improvements 288,499,000 238,817,000
589,405,000 509,314,000
Less accumulated depreciation and
amortization (324,080,000) (286,595,000)
265,325,000 222,719,000
Intangible assets, net 63,879,000 56,175,000
Other assets 22,478,000 15,162,000
Goodwill 200,942,000 198,638,000
287,299,000 269,975,000
Total assets $1,091,266,000 $1,090,701,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $56,323,000 $50,242,000
Income taxes payable 35,102,000 36,708,000
Accrued expenses and other
liabilities 104,026,000 92,495,000
Total current liabilities 195,451,000 179,445,000
Long-term liabilities:
Deferred tax liability 19,424,000 20,979,000
Deferred rent expense 26,125,000 21,959,000
Other liabilities 2,604,000 -
Total long-term liabilities 48,153,000 42,938,000
Stockholders' equity:
Class A stock - par value $0.05
per share 243,000 245,000
Common stock - par value $0.05
per share 4,410,000 4,729,000
Additional paid-in capital 75,486,000 60,631,000
Accumulated other comprehensive
income, net of tax 33,956,000 21,036,000
Retained earnings 733,567,000 781,677,000
Total stockholders' equity 847,662,000 868,318,000
Total liabilities and
stockholders' equity $1,091,266,000 $1,090,701,000
SOURCE Claire's Stores, Inc.
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Related links:
http://www.clairestores.com
http://www.claires.com/
http://www.prnewswire.com/comp/174913.html/
CONTACT:
Marisa F. Jacobs, Esq., Vice President of
Corporate Communications and Investor Relations, of Claire's
Stores, Inc., phone: +1-212-594-3127, fax: +1-212-244-4237 or
marisa.jacobs@claires.com
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