PEMBROKE PINES, Fla., Nov. 18 /PRNewswire-FirstCall/ -- Claire's Stores,
Inc. (NYSE: CLE) today announced financial results for the third quarter of
Fiscal 2005 and updated its guidance relating to the balance of the fiscal
year.
Third Quarter
Results for the third quarter of Fiscal 2005, which ended October 30,
2004, were as follows: Net income increased eight percent to $27.2 million
from $25.3 million during the comparable period in Fiscal 2004, which ended
November 1, 2003. On a per share basis, diluted net income during the third
quarter of Fiscal 2005 rose four percent to $0.27 per share compared to $0.26
per share in Fiscal 2004. The Fiscal 2004 amounts include a benefit of
approximately $2 million or $0.02 per diluted share attributable to a tax
examination that was settled more favorably than anticipated.
For the third quarter of Fiscal 2005, net sales increased 12 percent to
$296.7 million, compared with $264.1 million for the same period last year.
Comparable store sales for the third quarter of Fiscal 2005 increased nine
percent, after achieving an eight percent increase in last year's third fiscal
quarter.
Third quarter comparable store sales by brand were as follows:
* Claire's North America: positive high single digits
* Claire's International: positive mid single digits
* Icing by Claire's: positive mid teens
Commenting on third quarter results, Co-Chairman and Co-Chief Executive
Officer Marla Schaefer said, "At nine percent, our same store sales once again
exceeded last year's comparable quarter. We have now recorded 30 months of
positive consolidated comps. At the same time, our sales were lower than
initially projected, due in part to the severity of the fall hurricane season
which resulted in lost sales not recouped later, and to the erratic nature of
sales during the third quarter. To keep inventories fresh and traffic up, we
increased promotional activities compared to last year. We believe this
combination of events was unusual, and as a result, net income was adversely
affected.
Veteran's Day was hugely successful and it traditionally bodes well for
the holiday shopping season. In total, however, the first two and a half weeks
of November have not met our expectations. We are going up against North
American double digit comp. sales in each of the past two fourth quarters and
recognize that increases of that magnitude cannot continue indefinitely.
Anecdotal reports are suggesting that holiday shopping is expected to get off
to a later start than last year. Taking all of these factors into account, we
concluded that the most appropriate course of action was to scale back our
fourth quarter projections. However, we are still optimistic about the fourth
quarter. We believe that our merchandise assortment is the best in years,
offering great style, assortment and value. Even with our modified
projections, we are expecting revenue growth of 9 to 11 percent."
Bonnie Schaefer, Co-Chairman and Co-Chief Executive Officer, offered
additional commentary. "We delivered a strong showing in Europe during the
third fiscal quarter. As we continue to generate positive comparable store
sales in Europe, any questions about the course of our action there are being
resolved. There is no longer any doubt that the initiatives initially
implemented in Switzerland, Austria and Germany, and more recently in the
United Kingdom and Ireland are contributing to the improved results we have
been reporting for our international division. France too is beginning to
show progress, as inventories are continually being upgraded to be more
reflective of those in North America, the percentage of jewelry available in
those stores is being increased and efforts to improve our customer service
are taking the highest priority. At this point, it is our belief that if we
continue on the current path, Europe will show sustained and material
improvement into Fiscal 2006."
Year to Date Results
For the first nine months of Fiscal 2005, revenues grew 15 percent to
$883.5 million from $768.9 million. Net income increased to $87.6 million or
$0.88 per diluted share, from $63.0 million or $.64 per diluted share in
Fiscal 2004, an increase of 39 percent, or 38 percent on a diluted per share
basis. Comparable store sales increased ten percent, compared with an
increase of seven percent during the first nine months of Fiscal 2004.
Store Count: End of the Third Fiscal Quarter:
October 30, 2004 November 1, 2003
Claire's North America 1,674 1,665
Claire's Europe 716 690
Icing by Claire's 454 494
Claire's Nippon 145 122
Total 2,989 2,971
Business Outlook for the Fourth Quarter and Full Year - Fiscal 2005
Fourth Quarter:
Fourth quarter revenues are being estimated to range between $396 and $405
million, in lieu of our earlier fourth quarter estimate of $412 to $414
million. These revised estimates represent an increase of 9 to 11 percent
over last year's revenue number of $364 million. Comparable store sales are
projected to rise by six to eight percent, following an increase of seven
percent in Fiscal 2004. Net income projections have been revised to $61 to
$66 million, or $0.61 to $0.66 per diluted share compared to $0.53 per diluted
share last year. The $0.53 amount includes a $0.06 per diluted share charge
attributable to the retirement package granted to the Company's founder and
former Chairman of the Board.
Full Year:
For Fiscal 2005 in its entirety, the Company is projecting that revenues
will grow by approximately 13 percent to approximately $1.28 billion and that
diluted EPS will reach $1.49 to $1.54 per share, versus $1.17 per share last
year, or $1.23 excluding the above-referenced $0.06 charge. Comparable store
sales are expected to grow by eight to nine percent, on top of a seven percent
increase for Fiscal 2004.
Quarterly Dividend
The Board of Directors has increased the regular quarterly cash dividend
payable on the Common Stock to $0.09 per share from $0.08 per share and on the
Class A Common Stock to $0.045 from $0.04 per share, respectively. Payment
will be made on December 17, 2004 to shareholders of record on December 7,
2004.
Conference Call Information
The Company will host its third quarter conference call on November 18,
2004, at 10:00 a.m. (EST). The call in number is 210-795-9101 and the
password is "Claires." A replay will be available through November 26, 2004.
The replay number is 402-998-0463 and the password is 25247. The conference
call is also being archived until November 27th 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 October 30, 2004, Claire's Stores, Inc. operated
approximately 2,840 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., 145 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 53 stores in the Middle
East under a licensing and merchandising agreement with Al Shaya Co., Ltd. and
three 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. 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; currency fluctuations and
exchange rate adjustments; changes in laws; 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 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
October 30, 2004 November 1, 2003
Net sales $296,702,000 100.0% $264,146,000 100.0%
Cost of sales,
occupancy and buying
expenses 139,232,000 46.9% 124,934,000 47.3%
Gross profit 157,470,000 53.1% 139,212,000 52.7%
Other expenses (income)
Selling, general
and administrative 105,738,000 35.6% 93,851,000 35.5%
Depreciation and
amortization 11,439,000 3.9% 10,208,000 3.9%
Interest expense 85,000 0.0% 591,000 0.2%
Interest and other
income (1,301,000) (0.4%) (1,210,000) (0.5%)
115,961,000 39.1% 103,440,000 39.2%
Income before income
taxes 41,509,000 14.0% 35,772,000 13.5%
Income taxes 14,351,000 4.8% 10,519,000 4.0%
Net income $27,158,000 9.2% $25,253,000 9.6%
Net income per share:
Basic:
Net Income per share $0.27 $0.26
Diluted:
Net Income per share $0.27 $0.26
Weighted average number
of shares outstanding:
Basic 98,935,000 97,900,000
Diluted 99,384,000 98,442,000
NINE MONTHS ENDED
October 30, 2004 November 1, 2003
Net sales $883,516,000 100.0% $768,850,000 100.0%
Cost of sales, occupancy
and buying expenses 406,675,000 46.0% 367,158,000 47.8%
Gross profit 476,841,000 54.0% 401,692,000 52.2%
Other expenses (income)
Selling, general and
administrative 313,364,000 35.5% 278,444,000 36.2%
Depreciation and
amortization 33,042,000 3.7% 30,453,000 4.0%
Interest expense 147,000 0.0% 2,008,000 0.3%
Interest and other
income (3,779,000) (0.4%) (3,055,000) (0.4%)
342,774,000 38.8% 307,850,000 40.0%
Income before income
taxes 134,067,000 15.2% 93,842,000 12.2%
Income taxes 46,468,000 5.3% 30,844,000 4.0%
Net income $87,599,000 9.9% $62,998,000 8.2%
Net income per share:
Basic:
Net Income per share $0.89 $0.64
Diluted:
Net Income per share $0.88 $0.64
Weighted average number
of shares outstanding:
Basic 98,923,000 97,800,000
Diluted 99,306,000 98,278,000
CLAIRE'S STORES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
October 30, 2004 November 1, 2003
ASSETS
Current assets:
Cash and cash equivalents $229,260,000 $213,366,000
Inventories 144,215,000 120,631,000
Prepaid expenses and other current assets 54,256,000 44,903,000
Total current assets 427,731,000 378,900,000
Property and equipment:
Land and building 18,151,000 18,151,000
Furniture, fixtures & equipment 239,226,000 219,734,000
Leasehold improvements 206,759,000 179,915,000
464,136,000 417,800,000
Less accumulated depreciation and
amortization (261,455,000) (235,360,000)
202,681,000 182,440,000
Intangible assets, net 50,744,000 38,536,000
Other assets 14,312,000 13,221,000
Goodwill 200,456,000 199,143,000
Total other assets 265,512,000 250,900,000
Total Assets $895,924,000 $812,240,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $- $ 41,250,000
Trade accounts payable 60,312,000 51,374,000
Income taxes payable 9,929,000 6,632,000
Accrued expenses 82,871,000 59,483,000
Total current liabilities 153,112,000 158,739,000
Long-term liabilities:
Long-term debt, excluding current portion - 58,750,000
Deferred rent expense 17,730,000 16,911,000
Deferred tax liability 18,611,000 11,440,000
Total long-term liabilities 36,341,000 87,101,000
Stockholders' equity:
Class A stock - par value $0.05 per share 257,000 134,000
Common stock - par value $0.05 per share 4,692,000 2,315,000
Additional paid-in capital 50,044,000 34,884,000
Accumulated other comprehensive income,
net of tax 26,106,000 14,917,000
Retained earnings 625,372,000 514,150,000
Total Stockholders' Equity 706,471,000 566,400,000
Total Liabilities and Stockholders' Equity $895,924,000 $812,240,000
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, or
marisa.jacobs@claires.com
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