Net Income Rises by 78 Percent; Full Year Guidance Raised;
Quarterly Dividend Increased
PEMBROKE PINES, Fla., May 20 /PRNewswire-FirstCall/ -- Claire's Stores,
Inc. (NYSE: CLE) today announced financial results for the first quarter of
Fiscal 2005 and provided guidance relating to the second quarter of Fiscal
2005 and the full fiscal year. In addition, the Company declared that it had
increased its regular quarterly dividend to $0.07 on its Common Stock and to
$0.035 on its Class A Common Stock.
First Quarter
Results for the first quarter of Fiscal 2005, which ended May 1, 2004,
were as follows: Net income increased 78 percent to $27.7 million from $15.6
million in Fiscal 2004, which ended May 3, 2003. On a per share basis,
diluted net income during the first quarter of Fiscal 2005 rose 75 percent to
$0.28 per share compared to $0.16 per share in Fiscal 2004.
For the first quarter of Fiscal 2005, net sales increased 17 percent to
$281.6 million, compared with $239.8 million for the same period last year.
Comparable store sales for the first quarter of Fiscal 2005 increased 11
percent, after achieving an eight percent increase in last year's first fiscal
quarter.
First quarter comparable store sales by brand were as follows:
-- Claire's North America: positive mid teens
-- Claire's Europe: negative mid single digits
-- Icing by Claire's: positive low twenties
Commenting on first quarter results, Co-Chairman and Co-Chief Executive
Officer Marla Schaefer said, "We began the year on a very positive note,
following the substantial growth recorded last year. Our focus is on
sustaining this momentum quarter after quarter. We are accomplishing this
through disciplined buying and highly effective merchandising methods, so that
our stores remain fresh and consistently offer our customers newness and
value. Our sales are robust in both the jewelry and accessories categories.
As expected, after Christmas, the emphasis turned away from gift items to
jewelry, producing an inventory allocation of 67 percent jewelry and 33
percent accessories. Record levels of net income are attributable to the
growth in comparable store sales, which enabled us to obtain additional
leverage of fixed costs, as well as the increase in gross margins, which
primarily are a function of the merchandise mix."
Bonnie Schaefer, Co-Chairman and Co-Chief Executive Officer, offered
additional commentary on the first quarter of Fiscal 2005. "Last year, a
great deal of work was carried out to differentiate our Icing by Claire's
stores from the North American Claire's stores and to feature merchandise that
is most appealing to Icing's core customer: young women between the ages of 17
to 27. During the second half of that year, Icing began to show significant
improvement as measured by increases in comparable store sales. We are
continuing our efforts to refine the Icing by Claire's concept and believe its
healthy performance can be sustained. Now, we are undertaking the same
approach in Europe and it remains our belief that comparable store sales in
Europe will begin to show improvement in the second half of the fiscal year."
Store Count: End of First Fiscal Quarter:
May 1, 2004 May 3, 2003
Claire's North America 1,664 1,648
Claire's Europe 705 663
Icing by Claire's 459 513
Claire's Nippon 131 115
Total 2,959 2,939
Business Outlook for the Second Quarter and Full Year -- Fiscal 2005
Second Quarter:
For the second quarter of Fiscal 2005, we are estimating revenues between
$295 and $297 million, an increase of 11 to 12 percent. Same store sales are
projected to rise by 6 to 7 percent. This follows an increase of five percent
in the second quarter of Fiscal 2004. Net income is projected to reach $28 to
$29 million, or $0.28 to $0.29 per diluted share.
Full Year:
For Fiscal 2005 in its entirety, the Company has revised its projections
upward in light of the strong performance in the first fiscal quarter. The
Company is now projecting that revenues will grow by approximately nine to
eleven percent to $1.23 billion to $1.25 billion and that diluted EPS will
reach $1.41 to $1.45 per share, versus $1.23 per share last year. Same store
sales are expected to grow by four to five percent.
Quarterly Dividend
The Board of Directors has increased the regular quarterly cash dividend
payable on the Common Stock and the Class A Common Stock, to $0.07 per share
and $0.035 per share, respectively. Payment will be made on June 18, 2004 to
shareholders of record on June 8, 2004.
Conference Call Information
The Company will host its first quarter conference call on May 20, 2004,
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 28, 2004. The replay
number is 402-220-5348 and the password is 25247. The conference call is also
being archived until May 28th 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 30, 2004, Claire's Stores, Inc. operated
approximately 2,830 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., 130 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 55 stores in the Middle
East under a licensing and merchandising agreement with Al Shaya Co., Ltd.
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 conditions; currency fluctuations and exchange
rate adjustments; 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 Internet home
page: http://www.clairestores.com.
CLAIRE'S STORES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
May 1, 2004 May 3, 2003
Assets
Current assets:
Cash and cash equivalents $217,539,000 $167,271,000
Inventories 107,918,000 98,044,000
Prepaid expenses and other
current assets 39,185,000 50,192,000
Total current assets 364,642,000 315,507,000
Property and equipment:
Land and buildings 18,151,000 18,091,000
Furniture, fixtures & equipment 228,690,000 209,603,000
Leasehold improvements 190,406,000 164,513,000
437,247,000 392,207,000
Less accumulated depreciation and
amortization (247,626,000) (219,288,000)
189,621,000 172,919,000
Intangible assets, net 43,592,000 31,134,000
Other assets 15,834,000 13,594,000
Goodwill 198,868,000 198,142,000
Total Assets $812,557,000 $731,296,000
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $- $40,881,000
Accounts payable 44,803,000 50,278,000
Income taxes payable 24,946,000 9,944,000
Accrued expenses 62,483,000 46,530,000
Total current liabilities 132,232,000 147,633,000
Long-term liabilities:
Long-term debt, excluding current
portion - 41,250,000
Deferred rent expense 17,657,000 16,073,000
Deferred tax liability 13,345,000 9,894,000
Total long-term liabilities 31,002,000 67,217,000
Stockholders' equity:
Class A stock - par value $0.05
per share 260,000 135,000
Common stock - par value $0.05
per share 4,687,000 2,309,000
Additional paid-in capital 49,413,000 33,198,000
Other comprehensive income 15,046,000 8,386,000
Retained earnings 579,917,000 472,418,000
Total Stockholders' Equity 649,323,000 516,446,000
Total Liabilities and
Stockholders' Equity $812,557,000 $731,296,000
CLAIRE'S STORES, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
THREE MONTHS ENDED
May 1, 2004 May 3, 2003
Net sales $281,591,000 100.0% $239,756,000 100.0%
Cost of sales, occupancy, and
buying expenses 125,524,000 44.6% 115,140,000 48.0%
Gross Profit 156,067,000 55.4% 124,616,000 52.0%
Other Expenses:
Selling and general
administrative expense 104,245,000 37.0% 90,991,000 38.0%
Depreciation and
amortization 10,659,000 3.8% 9,854,000 4.1%
Interest expense 30,000 0.0% 772,000 0.3%
Interest and other income (1,210,000) (0.4%) (944,000) (0.4%)
113,724,000 40.4% 100,673,000 42.0%
Income before income taxes 42,343,000 15.0% 23,943,000 10.0%
Income taxes 14,651,000 5.2% 8,378,000 3.5%
Net income $27,692,000 9.8% $15,565,000 6.5%
Net Income per share:
Basic:
Net Income per share $0.28 $0.16
Diluted:
Net Income per share $0.28 $0.16
Weighted average number of
shares outstanding:
Basic 98,916,000 97,696,000
Diluted 99,239,000 98,084,000
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 of Claire's Stores, Inc.,
+1-212-594-3127, Fax - +1-212-244-4237, marisa.jacobs@claires.com
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