Revenues Rise Three Percent; Diluted Net Income Per Share Reaches $0.30;
Regular Quarterly Dividend Declared
PEMBROKE PINES, Fla., May 18 /PRNewswire-FirstCall/ -- Claire's Stores,
Inc. (NYSE: CLE) today announced financial results for the first quarter of
Fiscal 2007 and provided guidance relating to the second fiscal quarter and
Fiscal 2007 in its entirety.
First Quarter
Results for the first quarter of Fiscal 2007, which ended April 29,
2006, were as follows: net income was $29.7 million, in line with the first
fiscal quarter of Fiscal 2006, which ended April 30, 2005. On a per share
basis, diluted net income was $0.30 for both first fiscal quarters of 2007
and 2006.
For the first quarter of Fiscal 2007, net sales increased three percent
to $311.9 million from $302.7 million for the same period last year.
Comparable store sales for the first quarter of Fiscal 2007 increased three
percent, after achieving a five percent increase in last year's first
fiscal quarter.
First quarter comparable store sales by brand were as follows:
* Claire's North America: positive low single digits
* Claire's International: positive low single digits
* Icing by Claire's: positive mid single digits
Commenting on first quarter results, Co-Chairman and Co-Chief Executive
Officer Marla Schaefer said, "Our primary objective is to advance the value
of our business by steadily increasing sales and generating higher
earnings. Although we approached the first quarter knowing it would be
challenging, Easter's flip into April and its three week delay impacted our
sales more than we had anticipated due to the late timing of a significant
number of spring breaks and proms, along with our Mother's Day business. We
acted quickly to prevent a build up in inventories and, having done so,
remain optimistic going forward that our merchandise is fresh and in line
with the latest fashion trends. We will remain conservative in our guidance
until we see a sustained pick up in transactions."
Bonnie Schaefer, Co-Chairman and Co-Chief Executive Officer, offered
additional commentary on the first quarter of Fiscal 2007. "We are very
pleased that our International division delivered another quarter of
positive comparable store sales growth. Our efforts to improve our European
stores by refining our inventory, improving their visual appeal and
enhancing the level of our customer service are proving successful. Each
month we are identifying additional initiatives to introduce, setting the
stage for even more opportunities to boost our performance. It is
unfortunate that economic slowdowns in parts of Europe and frequent
political turmoil in France are hindering our immediate progress. We
believe however, that our focus on strengthening our international
operations makes great sense and are committed to moving forward with our
work in this area."
Store Count: End of First Fiscal Quarter:
April 29, 2006 April 30, 2005
Claire's North America 1,682 1,678
Claire's Europe 792 729
Icing by Claire's 432 445
Claire's Nippon 180 161
Total 3,086 3,013
Business Outlook for the Second Quarter and Full Year - Fiscal 2007
Second Quarter:
For the second quarter of Fiscal 2007, we are estimating revenues
between $338 and $342 million, an increase of four to five percent.
Comparable store sales are projected to rise by three percent. This follows
an increase of five percent in the second quarter of Fiscal 2006. Net
income on a diluted per share basis is projected to be essentially flat,
ranging between $0.35 to $0.36.
Full Year:
For Fiscal 2007 in its entirety, the Company is currently 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 range from flat to an increase of 10
basis points. SG&A is projected to decrease as a percentage of sales,
resulting in a 30-50 basis point improvement.
Net income on a diluted per share basis is projected to reach $1.90 to
$1.95. This projection assumes that the diluted weighted average number of
shares outstanding will approximate 96.0 to 97.0 million for Fiscal 2007.
Stock Buyback Activity
As of the end of the first fiscal quarter, we repurchased approximately
1,032,000 shares of common stock at a total cost of approximately $35.2
million. Our objective is to complete the balance of the buyback this
fiscal year.
Quarterly Dividend
The Board of Directors declared the regular quarterly cash dividend of
$0.10 per share payable on the Common Stock and $0.05 per share payable on
the Class A Common Stock. Payment will be made on June 16, 2006 to
shareholders of record on June 6, 2006.
Conference Call Information
The Company will host its first quarter conference call on May 18,
2006, at 10:00 a.m. (EDT). The call in number is 210-795-9101 and the
password is "Claires." A replay will be available through May 26, 2006. The
replay number is 203-369-1696 and the password is 25247. The conference
call is also being archived until May 26th 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 April 29, 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, Portugal, Holland and Belgium.
Claire's Stores, Inc. operates through its subsidiary, Claire's Nippon,
Co., Ltd., 180 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 92 stores in the Middle East and Turkey
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.
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, political and
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 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.
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 Internet
home page: http://www.clairestores.com.
Contact Information:
Marisa F. Jacobs
Vice President of Corporate Communications and Investor Relations
Phone: (212) 594-3127 Fax: (212) 244-4237
Email marisa.jacobs@claires.com
CLAIRE'S STORES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
THREE MONTHS ENDED
April 29, 2006 April 30, 2005
Net sales $311,927,000 100.0% $302,708,000 100.0%
Cost of sales, occupancy and
buying expenses 147,174,000 47.2% 138,695,000 45.8%
Gross profit 164,753,000 52.8% 164,013,000 54.2%
Other expenses (income):
Selling, general and
administrative 111,676,000 35.8% 110,517,000 36.5%
Depreciation and
amortization 13,158,000 4.2% 12,348,000 4.1%
Interest and other income (4,567,000) (1.5%) (1,961,000) (0.6%)
120,267,000 38.6% 120,904,000 39.9%
Income before income taxes 44,486,000 14.3% 43,109,000 14.2%
Income taxes 14,785,000 4.7% 13,407,000 4.4%
Net income $29,701,000 9.5% $29,702,000 9.8%
Net income per share:
Basic:
Net Income per share $0.30 $0.30
Diluted:
Net Income per share $0.30 $0.30
Weighted average number of
shares outstanding:
Basic 99,160,000 98,994,000
Diluted 99,572,000 99,358,000
CLAIRE'S STORES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
April 29, 2006 April 30, 2005
ASSETS
Current assets:
Cash and cash equivalents $386,354,000 $316,077,000
Inventories 128,341,000 117,077,000
Prepaid expenses and other current
assets 79,443,000 69,840,000
Total current assets 594,138,000 502,994,000
Property and equipment:
Land and building 17,350,000 18,151,000
Furniture, fixtures and equipment 261,565,000 242,367,000
Leasehold improvements 252,374,000 219,416,000
531,289,000 479,934,000
Less accumulated depreciation and
amortization (296,272,000) (271,649,000)
235,017,000 208,285,000
Intangible assets, net 59,843,000 53,846,000
Other assets 15,200,000 13,716,000
Goodwill 199,660,000 200,989,000
274,703,000 268,551,000
Total assets $1,103,858,000 $979,830,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $72,642,000 $59,670,000
Income taxes payable 27,609,000 27,486,000
Accrued expenses 86,578,000 73,811,000
Total current liabilities 186,829,000 160,967,000
Long-term liabilities:
Deferred tax liability 21,513,000 23,740,000
Deferred rent expense 22,302,000 20,094,000
Other liabilities 992,000 --
Total long-term liabilities 44,807,000 43,834,000
Stockholders' equity:
Class A stock - par value $0.05 per share 244,000 256,000
Common stock - par value $0.05 per share 4,702,000 4,703,000
Additional paid-in capital 71,982,000 51,418,000
Accumulated other comprehensive income,
net of tax 28,730,000 26,387,000
Retained earnings 766,564,000 692,265,000
Total stockholders' equity 872,222,000 775,029,000
Total liabilities and
stockholders' equity $1,103,858,000 $979,830,000
SOURCE Claire's Stores, Inc.
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Related links:
http://www.clairestores.com
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, or marisa.jacobs@claires.com
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