PEMBROKE PINES, Fla., Aug. 18 /PRNewswire-FirstCall/ -- Claire's Stores,
Inc. (NYSE: CLE) today announced financial results for the second quarter of
Fiscal 2006. The Company also provided guidance relating to the third quarter
of Fiscal 2006 as well as the full fiscal year.
Second Quarter
Results for the second quarter of Fiscal 2006, which ended July 30, 2005,
were as follows: Net income rose eight percent to $35.5 million compared to
$32.7 million during the second quarter of Fiscal 2005, which ended July 31,
2004. On a per share basis, diluted net income during the second quarter of
Fiscal 2006 rose nine percent to $0.36 from $0.33 per share.
For the second quarter of Fiscal 2006, net sales increased seven percent
to $325.0 million from $305.2 million for the same period last year.
Comparable store sales for the second quarter of Fiscal 2006 increased five
percent, after achieving a ten percent increase in last year's second fiscal
quarter.
Second quarter comparable store sales by brand were as follows:
* Claire's North America: positive low single digits
* Claire's Europe: positive high single digits
* Icing by Claire's: positive mid single digits
Commenting on second quarter results, Co-Chairman and Co-Chief Executive
Officer Marla Schaefer said, "We are pleased that our financial results for
the second quarter exceeded our guidance due to stronger than expected
comparable store sales. Our cautious stance when we issued our guidance for
the second fiscal quarter stemmed from the fact that we were up against strong
comparable store sales in last year's second fiscal quarter. We were also
concerned about the impact on customer behavior of shifting levels of consumer
confidence as well as steadily increasing fuel prices. Despite our concerns,
July business was brisk as customers took advantage of sales in the early part
of the month and then returned to the stores later to begin stocking up on
back to school and fall items."
Bonnie Schaefer, Co-Chairman and Co-Chief Executive Officer, offered
additional commentary on the second quarter of Fiscal 2006. "Several exciting
events made the second quarter noteworthy with respect to Claire's
international operations. The opening of stores in Spain and the execution of
our first leases in Holland mark a new phase in our international expansion,
as we entered two countries by means of organic growth, rather than through an
acquisition. From a financial perspective, our stores in Europe generated
comparable store sales increases that reached the high single digits for the
second quarter in a row. This is continued evidence that the work we have
undertaken in Europe over the past two years has produced measurable
improvements. Our customers are finding more merchandise that appeals to
their fashion sense than they did several years ago, and we in turn are
experiencing a healthy increase in comparable store sales as a result."
Year to Date Results
For the first six months of Fiscal 2006, revenues grew seven percent to
$627.8 million from $586.8 million. Net income increased to $65.2 million or
$0.66 per diluted share, from $60.4 million or $0.61 per diluted share, an
increase of eight percent both in absolute terms and on a diluted per share
basis. Comparable store sales increased five percent, compared with an
increase of 11 percent during the first six months of Fiscal 2005.
Store Count: End of Second Fiscal Quarter:
July 30, 2005 July 31, 2004
Claire's North America 1,673 1,664
Claire's Europe 736 712
Icing by Claire's 442 457
Claire's Nippon 166 134
Total 3,017 2,967
Business Outlook for the Third Fiscal Quarter and Full Year -- Fiscal 2006
Third Quarter:
For the third quarter of Fiscal 2006, we are estimating revenues between
$308 and $314 million, an increase of four to six percent. Comparable store
sales are projected to rise by three to five percent. This follows an
increase of nine percent in the third quarter of Fiscal 2005. Net income is
projected to reach $27 to $30 million, or $0.27 to $0.30 per diluted share.
Gross margins as a percentage of sales are expected to be 20 to 30 basis
points higher than last year's third fiscal quarter. SG&A as a percentage of
sales is projected to be within a range of 10 basis points below to 20 basis
points above last year's level.
Full Year:
For Fiscal 2006 in its entirety, revenues are projected to grow by
approximately five to seven percent from $1.34 billion to $1.37 billion.
Comparable store sales are expected to increase by three to five percent.
Gross margins as a percentage of sales are anticipated to improve by 25 to
30 basis points. SG&A expenses as a percentage of sales are anticipated to
decline 30 to 50 basis points.
Net income is projected to be within a range of $1.54 to $1.65 on a
diluted per share basis.
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 16, 2005 to
shareholders of record on September 6, 2005.
Conference Call Information
The Company will host its second quarter conference call on August 18,
2005, at 10:00 a.m. (EDT). The call in number is 210-795-9191 and the
password is "Claires." A replay will be available through August 26, 2005.
The replay number is 203-369-1969 and the password is 25247. The conference
call is also being archived until August 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 July 30, 2005, Claire's Stores, Inc. operated
approximately 2,850 stores in the United States, Canada, Puerto Rico, the
Virgin Islands, the United Kingdom, Ireland, France, Switzerland, Austria,
Germany, and Spain. Claire's Stores, Inc. operates through its subsidiary,
Claire's Nippon, Co., Ltd., 166 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 70 stores in the Middle
East and Turkey under a licensing and merchandising agreement with Al Shaya
Co., Ltd. and six 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 29, 2005. 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 30, 2005 July 31, 2004
Net sales $325,042,000 100.0% $305,223,000 100.0%
Cost of sales, occupancy and
buying expenses 151,848,000 46.7% 141,920,000 46.5%
Gross profit 173,194,000 53.3% 163,303,000 53.5%
Other expenses (income):
Selling, general and
administrative 111,602,000 34.3% 103,381,000 33.9%
Depreciation and
amortization 11,776,000 3.6% 10,944,000 3.6%
Interest expense (28,000) 0.0% 32,000 0.0%
Interest and other income (3,083,000) (0.9%) (1,267,000) (0.4%)
120,267,000 37.0% 113,090,000 37.1%
Income before income taxes 52,927,000 16.3% 50,213,000 16.5%
Income taxes 17,469,000 5.4% 17,468,000 5.7%
Net income $35,458,000 10.9% $32,745,000 10.7%
Net income per share:
Basic:
Net Income per share $0.36 $0.33
Diluted:
Net Income per share $0.36 $0.33
Weighted average number of
shares outstanding:
Basic 99,056,000 98,917,000
Diluted 99,441,000 99,276,000
SIX MONTHS ENDED
July 30, 2005 July 31, 2004
Net sales $627,750,000 100.0% $586,814,000 100.0%
Cost of sales, occupancy and
buying expenses 290,543,000 46.3% 267,444,000 45.6%
Gross profit 337,207,000 53.7% 319,370,000 54.4%
Other expenses (income):
Selling, general and
administrative 222,064,000 35.4% 207,626,000 35.4%
Depreciation and
amortization 24,124,000 3.8% 21,603,000 3.7%
Interest expense 27,000 0.0% 62,000 0.0%
Interest and other income (5,044,000) (0.8%) (2,477,000) (0.4%)
241,171,000 38.4% 226,814,000 38.7%
Income before income taxes 96,036,000 15.3% 92,556,000 15.8%
Income taxes 30,876,000 4.9% 32,119,000 5.5%
Net income $65,160,000 10.4% $60,437,000 10.3%
Net income per share:
Basic:
Net Income per share $0.66 $0.61
Diluted:
Net Income per share $0.66 $0.61
Weighted average number of
shares outstanding:
Basic 99,025,000 98,916,500
Diluted 99,401,000 99,258,500
CLAIRE'S STORES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
July 30, 2005 July 31, 2004
ASSETS
Current assets:
Cash and cash equivalents $328,185,000 $217,770,000
Inventories 120,018,000 114,649,000
Prepaid expenses and other
current assets 68,599,000 54,853,000
Total current assets 516,802,000 387,272,000
Property and equipment:
Land and building 18,151,000 18,151,000
Furniture, fixtures and equipment 243,461,000 233,817,000
Leasehold improvements 220,413,000 197,096,000
482,025,000 449,064,000
Less accumulated depreciation and
amortization (272,731,000) (253,297,000)
209,294,000 195,767,000
Intangible assets, net 51,562,000 45,646,000
Other assets 14,236,000 15,257,000
Goodwill 198,889,000 199,258,000
264,687,000 260,161,000
Total assets $990,783,000 $843,200,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $60,150,000 $49,153,000
Income taxes payable 9,594,000 6,581,000
Accrued expenses 82,177,000 76,249,000
Total current liabilities 151,921,000 131,983,000
Long-term liabilities:
Deferred tax liability 22,969,000 15,987,000
Deferred rent expense 20,404,000 17,789,000
Total long-term liabilities 43,373,000 33,776,000
Stockholders' equity:
Class A stock - par value $0.05
per share 256,000 257,000
Common stock - par value $0.05
per share 4,707,000 4,689,000
Additional paid-in capital 53,696,000 49,415,000
Accumulated other comprehensive
income, net of tax 18,772,000 17,160,000
Retained earnings 718,058,000 605,920,000
Total stockholders' equity 795,489,000 677,441,000
Total liabilities and
stockholders' equity $990,783,000 $843,200,000
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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