Revenues Increase Seven Percent; Diluted Net Income Per Share Increases
Three Percent to $0.37; Company Declares Regular Quarterly Dividend
PEMBROKE PINES, Fla., Aug. 17 /PRNewswire-FirstCall/ -- Claire's
Stores, Inc. (NYSE: CLE) today announced financial results for the second
quarter of Fiscal 2007. The Company also provided guidance relating to the
third quarter of Fiscal 2007 as well as the full fiscal year.
Second Quarter Results
Results for the second quarter of Fiscal 2007, which ended July 29,
2006, were as follows: Net income rose one percent to $36.0 million
compared to $35.5 million during the second quarter of Fiscal 2006, which
ended July 30, 2005. On a per share basis, diluted net income during the
second quarter of Fiscal 2007 rose three percent to $0.37 from $0.36 per
share.
For the second quarter of Fiscal 2007, net sales increased seven
percent to $349.2 million from $325.0 million for the same period last
year. Comparable store sales for the second quarter of Fiscal 2007
increased two percent, after achieving a five percent increase in last
year's second fiscal quarter.
Second quarter comparable store sales by brand were as follows:
-- Claire's North America: positive mid single digits
-- Claire's Europe: negative low single digits
-- Icing by Claire's: positive low single digits
Commenting on second quarter results, Co-Chairman and Co-Chief
Executive Officer Marla Schaefer said, "Our diluted earnings per share
slightly exceeded our guidance due to our disciplined controlling of costs.
Sales have continued to deliver year over year growth, however the pace of
that growth has moderated somewhat after several years of strong expansion.
In our first quarter press release we indicated that our expectations for
the second quarter were conservative in light of transaction levels that
have shown a slight decline. Until these trends reverse themselves, we
believe that our conservative stance remains appropriate. At the same time,
we continue to believe that our back to school and fall merchandise is very
much on target in terms of complementing the latest apparel offerings."
Bonnie Schaefer, Co-Chairman and Co-Chief Executive Officer, offered
additional commentary on the second quarter of Fiscal 2007. "The
performance of our International division during the second Fiscal quarter
was not in line with our internal projections, which called for positive
comparable store sales growth. Although our performance was impacted to a
small extent by adverse external factors, we have been identifying specific
operational issues within the organization where improvements can be
implemented. This is our immediate focus, as we are committed to building
as strong an operation abroad as we enjoy in North America. Until that goal
has been met, we anticipate continued fluctuations in our International
comparable store sales results."
Year to Date Results
For the first six months of Fiscal 2007, revenues grew five percent to
$661.1 million from $627.8 million. Net income increased to $65.7 million
from $65.2 million and on a diluted per share basis, net income increased
two percent to $0.67 per diluted share from $0.66 per diluted share during
the first six months of Fiscal 2006. Comparable store sales increased three
percent, compared with an increase of five percent during the first six
months of Fiscal 2006.
Store Count: End of Second Fiscal Quarter:
July 29, 2006 July 30, 2005
Claire's North America 1,686 1,673
Claire's Europe 811 736
Icing by Claire's 438 442
Claire's Nippon 186 166
Total 3,121 3,017
Business Outlook for the Third Fiscal Quarter and Full Year - Fiscal 2007
Third Quarter:
For the third quarter of Fiscal 2007 we are estimating revenues between
$347 and $351 million, an increase of six to seven percent. Comparable
store sales are projected to rise by two to three percent. This follows an
increase of nine percent in the third quarter of Fiscal 2006. Net income is
projected to reach $0.38 to $0.40 per diluted share, assuming an average of
approximately 95.0 to 95.5 million shares outstanding.
Full Year:
For Fiscal 2007 in its entirety, the Company is currently projecting
that revenues will grow by approximately seven to eight percent to
approximately $1.47 billion to $1.48 billion. Comparable store sales are
expected to increase by two to three percent.
Gross margins as a percentage of sales are anticipated to range between
flat to a decrease of 30 basis points. SG&A is projected to decrease as a
percentage of sales, resulting in a 40 to 60 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 million to 97.0 million for Fiscal
2007.
Stock Buyback Activity
As of the end of the second quarter of Fiscal 2007, we repurchased
approximately 3,900,000 shares of common stock at a total cost of
approximately $112 million. Our objective is to complete the balance of the
buyback this fiscal year.
Quarterly Dividend
The Board of Directors has 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 September 15, 2006 to
shareholders of record on September 5, 2006.
Conference Call Information
The Company will host its second quarter conference call on August 17,
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 August 25, 2006.
The replay number is 203-369-1696 and the password is 25247. The conference
call is also being webcast and archived until August 25th on the Company's
corporate website at http://www.clairestores.com, where it can be accessed
by clicking on the "Conference Calls" link located under "Financial
Information" for a replay or download as an MP3 file.
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 July 29, 2006, Claire's Stores,
Inc. operated approximately 2,935 stores in the United States, Canada,
Puerto Rico, the Virgin Islands, the United Kingdom, Ireland, France,
Switzerland, Austria, Germany, Belgium, Holland, Portugal and Spain.
Claire's Stores, Inc. operates through its subsidiary, Claire's Nippon,
Co., Ltd., 186 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 100 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, 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.
CLAIRE'S STORES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
THREE MONTHS ENDED
July 29, 2006 July 30, 2005
Net sales $349,160,000 100.0% $325,042,000 100.0%
Cost of sales, occupancy and
buying expenses 167,879,000 48.1% 151,848,000 46.7%
Gross profit 181,281,000 51.9% 173,194,000 53.3%
Other expenses (income):
Selling, general and
administrative 118,109,000 33.8% 111,574,000 34.3%
Depreciation and
amortization 13,912,000 4.0% 11,776,000 3.6%
Interest and other income (4,681,000) (1.3%) (3,083,000) (0.9%)
127,340,000 36.5% 120,267,000 37.0%
Income before income taxes 53,941,000 15.4% 52,927,000 16.3%
Income taxes 17,979,000 5.1% 17,469,000 5.4%
Net income $35,962,000 10.3% $35,458,000 10.9%
Net income per share:
Basic:
Net Income per share $0.37 $0.36
Diluted:
Net Income per share $0.37 $0.36
Weighted average number of
shares outstanding:
Basic 97,560,000 99,056,000
Diluted 97,769,000 99,441,000
SIX MONTHS ENDED
July 29, 2006 July 30, 2005
Net sales $661,087,000 100.0% $627,750,000 100.0%
Cost of sales, occupancy and
buying expenses 315,053,000 47.7% 290,543,000 46.3%
Gross profit 346,034,000 52.3% 337,207,000 53.7%
Other expenses (income):
Selling, general and
administrative 229,785,000 34.8% 222,091,000 35.4%
Depreciation and
amortization 27,070,000 4.1% 24,124,000 3.8%
Interest and other income (9,248,000) (1.4%) (5,044,000) (0.8%)
247,607,000 37.5% 241,171,000 38.4%
Income before income taxes 98,427,000 14.9% 96,036,000 15.3%
Income taxes 32,764,000 5.0% 30,876,000 4.9%
Net income $65,663,000 9.9% $65,160,000 10.4%
Net income per share:
Basic:
Net Income per share $0.67 $0.66
Diluted:
Net Income per share $0.67 $0.66
Weighted average number of
shares outstanding:
Basic 98,360,000 99,025,000
Diluted 98,675,000 99,401,000
CLAIRE'S STORES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
July 29, 2006 July 30, 2005
ASSETS
Current assets:
Cash and cash equivalents $317,123,000 $328,185,000
Inventories 133,591,000 120,018,000
Prepaid expenses 41,873,000 37,337,000
Other current assets 38,934,000 31,262,000
Total current assets 531,521,000 516,802,000
Property and equipment:
Land and building 17,350,000 18,151,000
Furniture, fixtures and equipment 266,801,000 243,461,000
Leasehold improvements 265,665,000 220,413,000
549,816,000 482,025,000
Less accumulated depreciation and
amortization (305,043,000) (272,731,000)
244,773,000 209,294,000
Intangible assets, net 60,054,000 51,562,000
Other assets 18,098,000 14,236,000
Goodwill 200,072,000 198,889,000
278,224,000 264,687,000
Total assets $1,054,518,000 $990,783,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $74,921,000 $60,150,000
Income taxes payable 15,420,000 9,594,000
Accrued expenses 92,660,000 82,177,000
Total current liabilities 183,001,000 151,921,000
Long-term liabilities:
Deferred tax liability 21,207,000 22,969,000
Deferred rent expense 23,727,000 20,404,000
Other liabilities 1,414,000 -
Total long-term liabilities 46,348,000 43,373,000
Stockholders' equity:
Class A stock - par value $0.05
per share 244,000 256,000
Common stock - par value $0.05
per share 4,569,000 4,707,000
Additional paid-in capital 73,717,000 53,696,000
Accumulated other comprehensive
income, net of tax 30,037,000 18,772,000
Retained earnings 716,602,000 718,058,000
Total stockholders' equity 825,169,000 795,489,000
Total liabilities and
stockholders' equity $1,054,518,000 $990,783,000
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, Claire's Stores, Inc.,
+1-212-594-3127, Fax: +1-212-244-4237, marisa.jacobs@claires.com
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