|
Delaware
|
95-3679695
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
1444 South Alameda Street
|
|
Los Angeles,
|
California
|
90021
|
|
(Address of principal executive offices and zip code)
|
Title of each class
|
|
Trading symbol(s)
|
|
Name of each exchange on which registered
|
|
|
|
|
|
|
|
Common Stock, par value $0.01 per share
|
|
GES
|
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
|
|
|
|
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
|
|
|
|
|
Emerging growth company
|
☐
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
|
o
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GUESS?, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
|
|||||||
|
Aug 3, 2019
|
|
Feb 2, 2019
|
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
131,060
|
|
|
$
|
210,460
|
|
Accounts receivable, net
|
292,985
|
|
|
321,995
|
|
||
Inventories
|
484,236
|
|
|
468,897
|
|
||
Other current assets
|
59,226
|
|
|
87,343
|
|
||
Total current assets
|
967,507
|
|
|
1,088,695
|
|
||
Property and equipment, net
|
302,906
|
|
|
315,558
|
|
||
Goodwill
|
36,279
|
|
|
37,072
|
|
||
Other intangible assets, net
|
5,750
|
|
|
6,934
|
|
||
Deferred tax assets
|
57,374
|
|
|
57,224
|
|
||
Restricted cash
|
519
|
|
|
535
|
|
||
Operating lease right-of-use assets
|
900,062
|
|
|
—
|
|
||
Other assets
|
131,807
|
|
|
143,187
|
|
||
|
$
|
2,402,204
|
|
|
$
|
1,649,205
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Current portion of borrowings and finance lease obligations
|
$
|
32,554
|
|
|
$
|
4,315
|
|
Accounts payable
|
246,492
|
|
|
286,657
|
|
||
Accrued expenses and other current liabilities
|
180,394
|
|
|
252,392
|
|
||
Current portion of operating lease liabilities
|
213,912
|
|
|
—
|
|
||
Total current liabilities
|
673,352
|
|
|
543,364
|
|
||
Convertible senior notes, net
|
242,055
|
|
|
—
|
|
||
Long-term debt and finance lease obligations, net
|
35,512
|
|
|
35,012
|
|
||
Deferred rent and lease incentives
|
—
|
|
|
84,893
|
|
||
Long-term operating lease liabilities
|
747,791
|
|
|
—
|
|
||
Other long-term liabilities
|
125,915
|
|
|
127,438
|
|
||
|
1,824,625
|
|
|
790,707
|
|
||
Redeemable noncontrolling interests
|
4,784
|
|
|
4,853
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 13)
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred stock, $.01 par value. Authorized 10,000,000 shares; no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value. Authorized 150,000,000 shares; issued 143,000,001 and 142,707,300 shares, outstanding 71,007,232 and 81,379,660 shares, as of August 3, 2019 and February 2, 2019, respectively
|
710
|
|
|
814
|
|
||
Paid-in capital
|
484,986
|
|
|
523,331
|
|
||
Retained earnings
|
1,053,604
|
|
|
1,077,747
|
|
||
Accumulated other comprehensive loss
|
(137,202
|
)
|
|
(126,179
|
)
|
||
Treasury stock, 71,992,769 and 61,327,640 shares as of August 3, 2019 and February 2, 2019, respectively
|
(847,226
|
)
|
|
(638,486
|
)
|
||
Guess?, Inc. stockholders’ equity
|
554,872
|
|
|
837,227
|
|
||
Nonredeemable noncontrolling interests
|
17,923
|
|
|
16,418
|
|
||
Total stockholders’ equity
|
572,795
|
|
|
853,645
|
|
||
|
$
|
2,402,204
|
|
|
$
|
1,649,205
|
|
GUESS?, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)
(in thousands)
(unaudited)
|
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
Aug 3, 2019
|
|
Aug 4, 2018
|
|
Aug 3, 2019
|
|
Aug 4, 2018
|
||||||||
Net earnings
|
$
|
26,176
|
|
|
$
|
25,734
|
|
|
$
|
5,595
|
|
|
$
|
4,747
|
|
Other comprehensive income (loss) (“OCI”):
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
||||||||
Losses arising during the period
|
(5,293
|
)
|
|
(22,953
|
)
|
|
(17,360
|
)
|
|
(47,525
|
)
|
||||
Derivative financial instruments designated as cash flow hedges
|
|
|
|
|
|
|
|
|
|
||||||
Gains arising during the period
|
2,286
|
|
|
4,675
|
|
|
6,722
|
|
|
12,167
|
|
||||
Less income tax effect
|
(308
|
)
|
|
(564
|
)
|
|
(880
|
)
|
|
(1,588
|
)
|
||||
Reclassification to net earnings for (gains) losses realized
|
(1,801
|
)
|
|
2,311
|
|
|
(2,077
|
)
|
|
4,190
|
|
||||
Less income tax effect
|
229
|
|
|
(279
|
)
|
|
324
|
|
|
(542
|
)
|
||||
Defined benefit plans
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency and other adjustments
|
(167
|
)
|
|
(40
|
)
|
|
(60
|
)
|
|
303
|
|
||||
Less income tax effect
|
16
|
|
|
6
|
|
|
5
|
|
|
(26
|
)
|
||||
Net actuarial loss amortization
|
111
|
|
|
151
|
|
|
222
|
|
|
303
|
|
||||
Prior service credit amortization
|
(9
|
)
|
|
(7
|
)
|
|
(19
|
)
|
|
(14
|
)
|
||||
Less income tax effect
|
(12
|
)
|
|
(19
|
)
|
|
(23
|
)
|
|
(39
|
)
|
||||
Total comprehensive income (loss)
|
21,228
|
|
|
9,015
|
|
|
(7,551
|
)
|
|
(28,024
|
)
|
||||
Less comprehensive income (loss) attributable to noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
||||||
Net earnings
|
854
|
|
|
204
|
|
|
1,647
|
|
|
438
|
|
||||
Foreign currency translation adjustment
|
(452
|
)
|
|
511
|
|
|
(142
|
)
|
|
187
|
|
||||
Amounts attributable to noncontrolling interests
|
402
|
|
|
715
|
|
|
1,505
|
|
|
625
|
|
||||
Comprehensive income (loss) attributable to Guess?, Inc.
|
$
|
20,826
|
|
|
$
|
8,300
|
|
|
$
|
(9,056
|
)
|
|
$
|
(28,649
|
)
|
GUESS?, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
|
|||||||
|
Six Months Ended
|
||||||
|
Aug 3, 2019
|
|
Aug 4, 2018
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net earnings
|
$
|
5,595
|
|
|
$
|
4,747
|
|
Adjustments to reconcile net earnings to net cash used in operating activities:
|
|
|
|
|
|
||
Depreciation and amortization of property and equipment
|
35,665
|
|
|
31,195
|
|
||
Amortization of other long-term and intangible assets
|
1,560
|
|
|
1,850
|
|
||
Amortization of debt discount
|
2,662
|
|
|
—
|
|
||
Amortization of debt issuance costs
|
276
|
|
|
—
|
|
||
Share-based compensation expense
|
9,454
|
|
|
7,989
|
|
||
Unrealized forward contract gains
|
(34
|
)
|
|
(2,365
|
)
|
||
Net loss on disposition of property and equipment and long-term assets
|
3,753
|
|
|
4,125
|
|
||
Other items, net
|
5,606
|
|
|
10,467
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
24,492
|
|
|
(967
|
)
|
||
Inventories
|
(22,926
|
)
|
|
(71,044
|
)
|
||
Prepaid expenses and other assets
|
(1,596
|
)
|
|
(20,971
|
)
|
||
Operating lease assets and liabilities, net
|
1,340
|
|
|
—
|
|
||
Accounts payable and accrued expenses
|
(87,423
|
)
|
|
6,210
|
|
||
Other long-term liabilities
|
(1,381
|
)
|
|
7,112
|
|
||
Net cash used in operating activities
|
(22,957
|
)
|
|
(21,652
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Purchases of property and equipment
|
(34,551
|
)
|
|
(46,006
|
)
|
||
Changes in other assets
|
521
|
|
|
—
|
|
||
Acquisition of businesses, net of cash acquired
|
—
|
|
|
(6,321
|
)
|
||
Net cash settlement of forward contracts
|
162
|
|
|
685
|
|
||
Purchases of investments
|
—
|
|
|
(1,581
|
)
|
||
Net cash used in investing activities
|
(33,868
|
)
|
|
(53,223
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from short-term borrowings
|
90,136
|
|
|
—
|
|
||
Repayments of short-term borrowings
|
(61,724
|
)
|
|
—
|
|
||
Proceeds from issuance of convertible senior notes
|
300,000
|
|
|
—
|
|
||
Proceeds from issuance of warrants
|
28,080
|
|
|
—
|
|
||
Purchase of convertible note hedges
|
(60,990
|
)
|
|
—
|
|
||
Convertible debt issuance costs
|
(5,068
|
)
|
|
—
|
|
||
Purchase of equity forward contracts
|
(68,000
|
)
|
|
—
|
|
||
Repayment of finance lease obligations and borrowings
|
(1,561
|
)
|
|
(1,181
|
)
|
||
Dividends paid
|
(26,901
|
)
|
|
(36,625
|
)
|
||
Issuance of common stock, net of tax withholdings on vesting of stock awards
|
43
|
|
|
4,634
|
|
||
Purchase of treasury stock
|
(212,564
|
)
|
|
(23,620
|
)
|
||
Net cash used in financing activities
|
(18,549
|
)
|
|
(56,792
|
)
|
||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
(4,042
|
)
|
|
(16,581
|
)
|
||
Net change in cash, cash equivalents and restricted cash
|
(79,416
|
)
|
|
(148,248
|
)
|
||
Cash, cash equivalents and restricted cash at the beginning of the year
|
210,995
|
|
|
367,682
|
|
||
Cash, cash equivalents and restricted cash at the end of the period
|
$
|
131,579
|
|
|
$
|
219,434
|
|
|
|
|
|
||||
Supplemental cash flow data:
|
|
|
|
|
|
||
Interest paid
|
$
|
1,535
|
|
|
$
|
683
|
|
Income taxes paid, net of refunds
|
$
|
4,201
|
|
|
$
|
21,436
|
|
|
|
|
|
||||
Non-cash investing and financing activity:
|
|
|
|
||||
Assets acquired under finance lease obligations
|
$
|
3,055
|
|
|
$
|
1,164
|
|
Noncontrolling interest capital distributions
|
$
|
—
|
|
|
$
|
3,069
|
|
Sale of retail locations
|
$
|
5,088
|
|
|
$
|
—
|
|
|
For the three and six months ended August 3, 2019
|
||||||||||||||||||||||||||||||||
|
Guess?, Inc. Stockholders’ Equity
|
|
|
|
|
||||||||||||||||||||||||||||
|
Common Stock
|
|
|
|
|
|
|
|
Treasury Stock
|
|
|
|
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Paid-in
Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Shares
|
|
Amount
|
|
Nonredeemable
Noncontrolling
Interests
|
|
Total
|
||||||||||||||||
Balance at February 2, 2019
|
81,379,660
|
|
|
$
|
814
|
|
|
$
|
523,331
|
|
|
$
|
1,077,747
|
|
|
$
|
(126,179
|
)
|
|
61,327,640
|
|
|
$
|
(638,486
|
)
|
|
$
|
16,418
|
|
|
$
|
853,645
|
|
Cumulative adjustment from adoption of new accounting guidance
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,684
|
)
|
|
1,981
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
297
|
|
|||||||
Net earnings (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,374
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
793
|
|
|
(20,581
|
)
|
|||||||
Other comprehensive income (loss), net of income tax of ($499)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,508
|
)
|
|
—
|
|
|
—
|
|
|
310
|
|
|
(8,198
|
)
|
|||||||
Issuance of common stock under stock compensation plans including tax effect
|
545,881
|
|
|
5
|
|
|
(3,042
|
)
|
|
—
|
|
|
—
|
|
|
(211,221
|
)
|
|
2,225
|
|
|
—
|
|
|
(812
|
)
|
|||||||
Issuance of stock under Employee Stock Purchase Plan
|
11,377
|
|
|
1
|
|
|
69
|
|
|
—
|
|
|
—
|
|
|
(11,377
|
)
|
|
120
|
|
|
—
|
|
|
190
|
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
4,440
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,468
|
|
|||||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,331
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,331
|
)
|
|||||||
Share repurchases
|
(10,264,052
|
)
|
|
(103
|
)
|
|
103
|
|
|
—
|
|
|
—
|
|
|
10,264,052
|
|
|
(201,564
|
)
|
|
—
|
|
|
(201,564
|
)
|
|||||||
Equity component value of convertible note issuance, net
|
—
|
|
|
—
|
|
|
42,324
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,324
|
|
|||||||
Sale of common stock warrant
|
—
|
|
|
—
|
|
|
28,080
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,080
|
|
|||||||
Purchase of convertible note hedge
|
—
|
|
|
—
|
|
|
(46,440
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,440
|
)
|
|||||||
Equity forward contract issuance
|
—
|
|
|
—
|
|
|
(68,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(68,000
|
)
|
|||||||
Balance at May 4, 2019
|
71,672,866
|
|
|
$
|
717
|
|
|
$
|
480,865
|
|
|
$
|
1,036,386
|
|
|
$
|
(132,706
|
)
|
|
71,369,094
|
|
|
$
|
(837,705
|
)
|
|
$
|
17,521
|
|
|
$
|
565,078
|
|
Net earnings (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
25,322
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
854
|
|
|
26,176
|
|
|||||||
Other comprehensive loss, net of income tax of ($75)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,496
|
)
|
|
—
|
|
|
—
|
|
|
(452
|
)
|
|
(4,948
|
)
|
|||||||
Issuance of common stock under stock compensation plans including tax effect
|
64,080
|
|
|
—
|
|
|
(852
|
)
|
|
—
|
|
|
—
|
|
|
(106,039
|
)
|
|
1,249
|
|
|
—
|
|
|
397
|
|
|||||||
Issuance of stock under Employee Stock Purchase Plan
|
19,538
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
(19,538
|
)
|
|
230
|
|
|
—
|
|
|
268
|
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
4,928
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,986
|
|
|||||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,162
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,162
|
)
|
|||||||
Share repurchases
|
(749,252
|
)
|
|
(7
|
)
|
|
7
|
|
|
—
|
|
|
—
|
|
|
749,252
|
|
|
(11,000
|
)
|
|
—
|
|
|
(11,000
|
)
|
|||||||
Balance at August 3, 2019
|
71,007,232
|
|
|
$
|
710
|
|
|
$
|
484,986
|
|
|
$
|
1,053,604
|
|
|
$
|
(137,202
|
)
|
|
71,992,769
|
|
|
$
|
(847,226
|
)
|
|
$
|
17,923
|
|
|
$
|
572,795
|
|
|
For the three and six months ended August 4, 2018
|
||||||||||||||||||||||||||||||||
|
Guess?, Inc. Stockholders’ Equity
|
|
|
|
|
||||||||||||||||||||||||||||
|
Common Stock
|
|
|
|
|
|
|
|
Treasury Stock
|
|
|
|
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Paid-in
Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Shares
|
|
Amount
|
|
Nonredeemable
Noncontrolling
Interests
|
|
Total
|
||||||||||||||||
Balance at February 3, 2018
|
81,371,118
|
|
|
$
|
813
|
|
|
$
|
498,249
|
|
|
$
|
1,132,173
|
|
|
$
|
(93,062
|
)
|
|
60,252,569
|
|
|
$
|
(621,354
|
)
|
|
$
|
16,656
|
|
|
$
|
933,475
|
|
Cumulative adjustment from adoption of new accounting guidance
|
—
|
|
|
—
|
|
|
—
|
|
|
5,829
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,829
|
|
|||||||
Net earnings (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,221
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
234
|
|
|
(20,987
|
)
|
|||||||
Other comprehensive loss, net of income tax of ($1,339)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,728
|
)
|
|
—
|
|
|
—
|
|
|
(324
|
)
|
|
(16,052
|
)
|
|||||||
Issuance of common stock under stock compensation plans including tax effect
|
689,341
|
|
|
8
|
|
|
3,882
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,890
|
|
|||||||
Issuance of stock under Employee Stock Purchase Plan
|
15,313
|
|
|
—
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
(15,313
|
)
|
|
159
|
|
|
—
|
|
|
230
|
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
3,949
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,958
|
|
|||||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,499
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,499
|
)
|
|||||||
Share repurchases
|
(1,118,808
|
)
|
|
(11
|
)
|
|
11
|
|
|
—
|
|
|
—
|
|
|
1,118,808
|
|
|
(17,587
|
)
|
|
—
|
|
|
(17,587
|
)
|
|||||||
Balance at May 5, 2018
|
80,956,964
|
|
|
$
|
810
|
|
|
$
|
506,162
|
|
|
$
|
1,098,291
|
|
|
$
|
(108,790
|
)
|
|
61,356,064
|
|
|
$
|
(638,782
|
)
|
|
$
|
16,566
|
|
|
$
|
874,257
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
25,530
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
204
|
|
|
25,734
|
|
|||||||
Other comprehensive income (loss), net of income tax of ($856)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,230
|
)
|
|
—
|
|
|
—
|
|
|
511
|
|
|
(16,719
|
)
|
|||||||
Issuance of common stock under stock compensation plans including tax effect
|
60,008
|
|
|
—
|
|
|
279
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
279
|
|
|||||||
Issuance of stock under Employee Stock Purchase Plan
|
13,230
|
|
|
—
|
|
|
97
|
|
|
—
|
|
|
—
|
|
|
(13,230
|
)
|
|
138
|
|
|
—
|
|
|
235
|
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
4,012
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,031
|
|
|||||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,667
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,667
|
)
|
|||||||
Noncontrolling interest capital distribution
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
(3,069
|
)
|
|
(3,069
|
)
|
|||||||
Balance at August 4, 2018
|
81,030,202
|
|
|
$
|
810
|
|
|
$
|
510,550
|
|
|
$
|
1,105,173
|
|
|
$
|
(126,020
|
)
|
|
61,342,834
|
|
|
$
|
(638,644
|
)
|
|
$
|
14,212
|
|
|
$
|
866,081
|
|
(1)
|
Basis of Presentation and New Accounting Guidance
|
|
Balance Sheet Location
|
Aug 3, 2019
|
||
Assets
|
|
|
||
Operating
|
Operating lease right-of-use assets
|
$
|
900,062
|
|
Finance
|
Property and equipment, net
|
17,402
|
|
|
Total lease assets
|
$
|
917,464
|
|
|
|
|
|
||
Liabilities
|
|
|
||
Current:
|
|
|
||
Operating
|
Current portion of operating lease liabilities
|
$
|
213,912
|
|
Finance
|
Current portion of borrowings and finance lease obligations
|
2,465
|
|
|
Noncurrent:
|
|
|
||
Operating
|
Long-term operating lease liabilities
|
747,791
|
|
|
Finance
|
Long-term debt and finance lease obligations, net
|
15,618
|
|
|
Total lease liabilities
|
$
|
979,786
|
|
|
Income Statement Location
|
Three Months Ended
Aug 3, 2019 |
|
Six Months
Ended Aug 3, 2019 |
||||
Operating lease costs1
|
Cost of product sales
|
$
|
58,749
|
|
|
$
|
117,565
|
|
Operating lease costs1
|
Selling, general and administrative expenses
|
5,720
|
|
|
10,984
|
|
||
Finance lease costs
|
|
|
|
|
||||
Amortization of leased assets2
|
Cost of product sales
|
44
|
|
|
87
|
|
||
Amortization of leased assets2
|
Selling, general and administrative expenses
|
637
|
|
|
1,180
|
|
||
Interest on lease liabilities
|
Interest expense
|
286
|
|
|
573
|
|
||
Variable lease costs1
|
Cost of product sales
|
25,083
|
|
|
49,908
|
|
||
Variable lease costs1
|
Selling, general and administrative expenses
|
628
|
|
|
1,455
|
|
||
Short-term lease costs1
|
Selling, general and administrative expenses
|
183
|
|
|
395
|
|
||
Total lease costs
|
$
|
91,330
|
|
|
$
|
182,147
|
|
1
|
Rental expense for all property and equipment operating leases during the three and six months ended August 4, 2018 aggregated $70.6 million and $142.8 million, respectively, including percentage rent of $15.5 million and $31.9 million, respectively. During the three and six months ended August 4, 2018, the Company also recognized insurance, taxes, sales promotion and common area maintenance charges totaling $16.4 million and $31.3 million, respectively, related to its operating leases.
|
2
|
Amortization of leased assets related to finance leases are included in depreciation expense in the Company’s condensed consolidated statements of income.
|
Maturity of Lease Liabilities
|
Operating Leases
|
|
Finance Leases
|
|
Total
|
||||||
20201
|
$
|
131,202
|
|
|
$
|
1,825
|
|
|
$
|
133,027
|
|
2021
|
201,770
|
|
|
3,342
|
|
|
205,112
|
|
|||
2022
|
189,492
|
|
|
3,646
|
|
|
193,138
|
|
|||
2023
|
158,132
|
|
|
3,255
|
|
|
161,387
|
|
|||
2024
|
132,342
|
|
|
3,092
|
|
|
135,434
|
|
|||
After 2024
|
255,194
|
|
|
7,577
|
|
|
262,771
|
|
|||
Total lease payments
|
1,068,132
|
|
|
22,737
|
|
|
1,090,869
|
|
|||
Less: Interest
|
106,429
|
|
|
4,654
|
|
|
111,083
|
|
|||
Present value of lease liabilities
|
$
|
961,703
|
|
|
$
|
18,083
|
|
|
$
|
979,786
|
|
1
|
Represents the maturity of lease liabilities for the remainder of fiscal 2020 and does not include payments made during the six months ended August 3, 2019.
|
Lease Term and Discount Rate
|
Aug 3, 2019
|
Weighted-average remaining lease term (years)
|
|
Operating leases
|
6.0 years
|
Finance leases
|
6.8 years
|
Weighted-average discount rate
|
|
Operating leases
|
3.6%
|
Finance leases
|
7.1%
|
Supplemental Cash Flow Information
|
Six Months Ended Aug 3, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
||
Operating cash flows from operating leases
|
$
|
124,687
|
|
New operating ROU assets obtained in exchange for lease liabilities
|
$
|
99,951
|
|
(3)
|
Earnings per Share
|
(4)
|
Stockholders’ Equity
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
Aug 3, 2019
|
|
Aug 4, 2018
|
|
Aug 3, 2019
|
|
Aug 4, 2018
|
||||||||
Cash dividend declared per share
|
$
|
0.1125
|
|
|
$
|
0.2250
|
|
|
$
|
0.3375
|
|
|
$
|
0.4500
|
|
|
Three Months Ended Aug 3, 2019
|
||||||||||||||
|
Foreign Currency Translation Adjustment
|
|
Derivative Financial Instruments Designated as Cash Flow Hedges
|
|
Defined Benefit Plans
|
|
Total
|
||||||||
Balance at May 4, 2019
|
$
|
(131,923
|
)
|
|
$
|
8,663
|
|
|
$
|
(9,446
|
)
|
|
$
|
(132,706
|
)
|
Gains (losses) arising during the period
|
(4,841
|
)
|
|
1,978
|
|
|
(151
|
)
|
|
(3,014
|
)
|
||||
Reclassification to net earnings for (gains) losses realized
|
—
|
|
|
(1,572
|
)
|
|
90
|
|
|
(1,482
|
)
|
||||
Net other comprehensive income (loss)
|
(4,841
|
)
|
|
406
|
|
|
(61
|
)
|
|
(4,496
|
)
|
||||
Balance at August 3, 2019
|
$
|
(136,764
|
)
|
|
$
|
9,069
|
|
|
$
|
(9,507
|
)
|
|
$
|
(137,202
|
)
|
|
Six Months Ended Aug 3, 2019
|
||||||||||||||
|
Foreign Currency Translation Adjustment
|
|
Derivative Financial Instruments Designated as Cash Flow Hedges
|
|
Defined Benefit Plans
|
|
Total
|
||||||||
Balance at February 2, 2019
|
$
|
(119,546
|
)
|
|
$
|
2,999
|
|
|
$
|
(9,632
|
)
|
|
$
|
(126,179
|
)
|
Cumulative adjustment reclassified from retained earnings due to adoption of new accounting guidance1
|
—
|
|
|
1,981
|
|
|
—
|
|
|
1,981
|
|
||||
Gains (losses) arising during the period
|
(17,218
|
)
|
|
5,842
|
|
|
(55
|
)
|
|
(11,431
|
)
|
||||
Reclassification to net earnings for (gains) losses realized
|
—
|
|
|
(1,753
|
)
|
|
180
|
|
|
(1,573
|
)
|
||||
Net other comprehensive income (loss)
|
(17,218
|
)
|
|
4,089
|
|
|
125
|
|
|
(13,004
|
)
|
||||
Balance at August 3, 2019
|
$
|
(136,764
|
)
|
|
$
|
9,069
|
|
|
$
|
(9,507
|
)
|
|
$
|
(137,202
|
)
|
1
|
During the first quarter of fiscal 2020, the Company adopted new authoritative guidance which eliminated the requirement to separately measure and report ineffectiveness for instruments that qualify for hedge accounting and generally requires that the entire change in the fair value of such instruments ultimately be presented in the same line as the respective hedge item. As a result, there is no interest component recognized for the ineffective portion of instruments that qualify for hedge accounting, but rather all changes in the fair value of such instruments are included in other comprehensive income (loss) during the three and six months ended August 3, 2019. Upon adoption of this guidance, the Company reclassified approximately $2.0 million in gains from retained earnings to accumulated other comprehensive loss related to the previously recorded interest component on outstanding instruments that qualified for hedge accounting.
|
|
Three Months Ended Aug 4, 2018
|
||||||||||||||
|
Foreign Currency Translation Adjustment
|
|
Derivative Financial Instruments Designated as Cash Flow Hedges
|
|
Defined Benefit Plans
|
|
Total
|
||||||||
Balance at May 5, 2018
|
$
|
(91,297
|
)
|
|
$
|
(6,285
|
)
|
|
$
|
(11,208
|
)
|
|
$
|
(108,790
|
)
|
Gains (losses) arising during the period
|
(23,464
|
)
|
|
4,111
|
|
|
(34
|
)
|
|
(19,387
|
)
|
||||
Reclassification to net earnings for losses realized
|
—
|
|
|
2,032
|
|
|
125
|
|
|
2,157
|
|
||||
Net other comprehensive income (loss)
|
(23,464
|
)
|
|
6,143
|
|
|
91
|
|
|
(17,230
|
)
|
||||
Balance at August 4, 2018
|
$
|
(114,761
|
)
|
|
$
|
(142
|
)
|
|
$
|
(11,117
|
)
|
|
$
|
(126,020
|
)
|
|
Six Months Ended Aug 4, 2018
|
||||||||||||||
|
Foreign Currency Translation Adjustment
|
|
Derivative Financial Instruments Designated as Cash Flow Hedges
|
|
Defined Benefit Plans
|
|
Total
|
||||||||
Balance at February 3, 2018
|
$
|
(67,049
|
)
|
|
$
|
(14,369
|
)
|
|
$
|
(11,644
|
)
|
|
$
|
(93,062
|
)
|
Gains (losses) arising during the period
|
(47,712
|
)
|
|
10,579
|
|
|
277
|
|
|
(36,856
|
)
|
||||
Reclassification to net earnings for losses realized
|
—
|
|
|
3,648
|
|
|
250
|
|
|
3,898
|
|
||||
Net other comprehensive income (loss)
|
(47,712
|
)
|
|
14,227
|
|
|
527
|
|
|
(32,958
|
)
|
||||
Balance at August 4, 2018
|
$
|
(114,761
|
)
|
|
$
|
(142
|
)
|
|
$
|
(11,117
|
)
|
|
$
|
(126,020
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Location of (Gain) Loss Reclassified from Accumulated OCI into Earnings
|
||||||||||||
|
Aug 3, 2019
|
|
Aug 4, 2018
|
|
Aug 3, 2019
|
|
Aug 4, 2018
|
|
|||||||||
Derivative financial instruments designated as cash flow hedges:
|
|
|
|||||||||||||||
Foreign exchange currency contracts
|
$
|
(1,757
|
)
|
|
$
|
2,342
|
|
|
$
|
(1,987
|
)
|
|
$
|
4,028
|
|
|
Cost of product sales
|
Foreign exchange currency contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
201
|
|
|
Other income (expense)
|
||||
Interest rate swap
|
(44
|
)
|
|
(31
|
)
|
|
(90
|
)
|
|
(39
|
)
|
|
Interest expense
|
||||
Less income tax effect
|
229
|
|
|
(279
|
)
|
|
324
|
|
|
(542
|
)
|
|
Income tax expense
|
||||
|
(1,572
|
)
|
|
2,032
|
|
|
(1,753
|
)
|
|
3,648
|
|
|
|
||||
Defined benefit plans:
|
|
|
|
|
|
|
|
|
|
||||||||
Net actuarial loss amortization
|
111
|
|
|
151
|
|
|
222
|
|
|
303
|
|
|
Other income (expense)
|
||||
Prior service credit amortization
|
(9
|
)
|
|
(7
|
)
|
|
(19
|
)
|
|
(14
|
)
|
|
Other income (expense)
|
||||
Less income tax effect
|
(12
|
)
|
|
(19
|
)
|
|
(23
|
)
|
|
(39
|
)
|
|
Income tax expense
|
||||
|
90
|
|
|
125
|
|
|
180
|
|
|
250
|
|
|
|
||||
Total reclassifications during the period
|
$
|
(1,482
|
)
|
|
$
|
2,157
|
|
|
$
|
(1,573
|
)
|
|
$
|
3,898
|
|
|
|
(5)
|
Accounts Receivable
|
|
Aug 3, 2019
|
|
Feb 2, 2019
|
||||
Trade
|
$
|
284,543
|
|
|
$
|
314,651
|
|
Royalty
|
6,399
|
|
|
5,992
|
|
||
Other
|
10,968
|
|
|
9,892
|
|
||
|
301,910
|
|
|
330,535
|
|
||
Less allowances
|
8,925
|
|
|
8,540
|
|
||
|
$
|
292,985
|
|
|
$
|
321,995
|
|
(6)
|
Inventories
|
|
Aug 3, 2019
|
|
Feb 2, 2019
|
||||
Raw materials
|
$
|
2,669
|
|
|
$
|
881
|
|
Work in progress
|
69
|
|
|
162
|
|
||
Finished goods
|
481,498
|
|
|
467,854
|
|
||
|
$
|
484,236
|
|
|
$
|
468,897
|
|
(7)
|
Income Taxes
|
(8)
|
Segment Information
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
Aug 3, 2019
|
|
Aug 4, 2018
|
|
Aug 3, 2019
|
|
Aug 4, 2018
|
||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|
||||||
Americas Retail
|
$
|
198,966
|
|
|
$
|
197,125
|
|
|
$
|
375,389
|
|
|
$
|
368,465
|
|
Americas Wholesale
|
41,902
|
|
|
34,253
|
|
|
88,107
|
|
|
74,932
|
|
||||
Europe
|
340,509
|
|
|
311,998
|
|
|
550,564
|
|
|
517,433
|
|
||||
Asia
|
83,301
|
|
|
82,786
|
|
|
168,491
|
|
|
166,837
|
|
||||
Licensing
|
18,542
|
|
|
19,709
|
|
|
37,360
|
|
|
39,493
|
|
||||
Total net revenue
|
$
|
683,220
|
|
|
$
|
645,871
|
|
|
$
|
1,219,911
|
|
|
$
|
1,167,160
|
|
Earnings (loss) from operations:
|
|
|
|
|
|
|
|
|
|
||||||
Americas Retail
|
$
|
5,957
|
|
|
$
|
5,582
|
|
|
$
|
4,145
|
|
|
$
|
(98
|
)
|
Americas Wholesale
|
8,422
|
|
|
5,325
|
|
|
16,236
|
|
|
11,351
|
|
||||
Europe
|
51,594
|
|
|
30,531
|
|
|
35,267
|
|
|
10,198
|
|
||||
Asia
|
(4,800
|
)
|
|
1,634
|
|
|
(8,003
|
)
|
|
5,699
|
|
||||
Licensing
|
15,547
|
|
|
17,437
|
|
|
32,191
|
|
|
34,923
|
|
||||
Total segment earnings from operations
|
76,720
|
|
|
60,509
|
|
|
79,836
|
|
|
62,073
|
|
||||
Corporate overhead
|
(29,229
|
)
|
|
(25,647
|
)
|
|
(55,041
|
)
|
|
(51,492
|
)
|
||||
Asset impairment charges1
|
(1,504
|
)
|
|
(2,981
|
)
|
|
(3,279
|
)
|
|
(3,740
|
)
|
||||
Net gains on lease terminations2
|
—
|
|
|
—
|
|
|
—
|
|
|
152
|
|
||||
Total earnings from operations
|
$
|
45,987
|
|
|
$
|
31,881
|
|
|
$
|
21,516
|
|
|
$
|
6,993
|
|
1
|
During each of the periods presented, the Company recognized asset impairment charges for certain retail locations resulting from under-performance and expected store closures. Refer to Note 15 for more information regarding these asset impairment charges.
|
2
|
During the six months ended August 4, 2018, the Company recorded net gains on lease terminations related primarily to the early termination of certain lease agreements in North America. The net gains on lease terminations were recorded during the three months ended May 5, 2018.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
Aug 3, 2019
|
|
Aug 4, 2018
|
|
Aug 3, 2019
|
|
Aug 4, 2018
|
||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|
||||||
U.S.
|
$
|
176,557
|
|
|
$
|
171,802
|
|
|
$
|
340,928
|
|
|
$
|
325,112
|
|
Italy
|
86,497
|
|
|
84,663
|
|
|
136,932
|
|
|
142,334
|
|
||||
Canada
|
44,001
|
|
|
45,059
|
|
|
82,582
|
|
|
84,579
|
|
||||
Spain
|
39,900
|
|
|
39,954
|
|
|
67,897
|
|
|
66,351
|
|
||||
South Korea
|
32,898
|
|
|
35,624
|
|
|
66,815
|
|
|
73,256
|
|
||||
Other foreign countries
|
284,825
|
|
|
249,060
|
|
|
487,397
|
|
|
436,035
|
|
||||
Total product sales
|
664,678
|
|
|
626,162
|
|
|
1,182,551
|
|
|
1,127,667
|
|
||||
Net royalties
|
18,542
|
|
|
19,709
|
|
|
37,360
|
|
|
39,493
|
|
||||
Net revenue
|
$
|
683,220
|
|
|
$
|
645,871
|
|
|
$
|
1,219,911
|
|
|
$
|
1,167,160
|
|
(9)
|
Borrowings and Finance Lease Obligations
|
|
Aug 3, 2019
|
|
Feb 2, 2019
|
||||
Mortgage debt, maturing monthly through January 2026
|
$
|
19,384
|
|
|
$
|
19,738
|
|
Finance lease obligations
|
18,083
|
|
|
16,702
|
|
||
Borrowings under credit facilities
|
27,770
|
|
|
—
|
|
||
Other
|
2,829
|
|
|
2,887
|
|
||
|
68,066
|
|
|
39,327
|
|
||
Less current installments
|
32,554
|
|
|
4,315
|
|
||
Long-term debt and finance lease obligations
|
$
|
35,512
|
|
|
$
|
35,012
|
|
(10)
|
Convertible Senior Notes and Related Transactions
|
Liability component:
|
|
||
Principal
|
$
|
300,000
|
|
Unamortized debt discount
|
(53,913
|
)
|
|
Unamortized issuance costs
|
(4,032
|
)
|
|
Net carrying amount
|
$
|
242,055
|
|
|
|
||
Equity component, net1
|
$
|
42,324
|
|
1
|
Included in paid-in capital within stockholders’ equity on the condensed consolidated balance sheets and is net of debt issuance costs and deferred taxes.
|
(11)
|
Share-Based Compensation
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
Aug 3, 2019
|
|
Aug 4, 2018
|
|
Aug 3, 2019
|
|
Aug 4, 2018
|
||||||||
Stock options
|
$
|
697
|
|
|
$
|
672
|
|
|
$
|
1,287
|
|
|
$
|
1,367
|
|
Stock awards/units
|
4,205
|
|
|
3,292
|
|
|
8,020
|
|
|
6,462
|
|
||||
Employee Stock Purchase Plan
|
84
|
|
|
67
|
|
|
147
|
|
|
160
|
|
||||
Total share-based compensation expense
|
$
|
4,986
|
|
|
$
|
4,031
|
|
|
$
|
9,454
|
|
|
$
|
7,989
|
|
|
Number of Units
|
|
Weighted Average Grant Date Fair Value
|
|||
Nonvested at February 2, 2019
|
1,371,230
|
|
|
$
|
16.44
|
|
Granted
|
455,339
|
|
|
18.33
|
|
|
Vested
|
103,369
|
|
|
20.70
|
|
|
Forfeited
|
334,526
|
|
|
18.01
|
|
|
Nonvested at August 3, 2019
|
1,388,674
|
|
|
$
|
16.37
|
|
|
Number of Units
|
|
Weighted Average Grant Date Fair Value
|
|||
Nonvested at February 2, 2019
|
518,409
|
|
|
$
|
14.28
|
|
Granted1
|
17,557
|
|
|
15.20
|
|
|
Vested1
|
158,014
|
|
|
15.20
|
|
|
Forfeited
|
89,750
|
|
|
15.58
|
|
|
Nonvested at August 3, 2019
|
288,202
|
|
|
$
|
13.43
|
|
1
|
As a result of the achievement of certain market-based vesting conditions, there were 17,557 shares that vested in addition to the original target number of shares granted in fiscal 2017.
|
(12)
|
Related Party Transactions
|
(13)
|
Commitments and Contingencies
|
|
Six Months Ended
|
||||||
|
Aug 3, 2019
|
|
Aug 4, 2018
|
||||
Beginning balance
|
$
|
4,853
|
|
|
$
|
5,590
|
|
Foreign currency translation adjustment
|
(69
|
)
|
|
(639
|
)
|
||
Ending balance
|
$
|
4,784
|
|
|
$
|
4,951
|
|
(14)
|
Defined Benefit Plans
|
|
Three Months Ended Aug 3, 2019
|
||||||||||
|
SERP
|
|
Foreign Pension Plans
|
|
Total
|
||||||
Service cost
|
$
|
—
|
|
|
$
|
808
|
|
|
$
|
808
|
|
Interest cost
|
481
|
|
|
67
|
|
|
548
|
|
|||
Expected return on plan assets
|
—
|
|
|
(78
|
)
|
|
(78
|
)
|
|||
Net amortization of unrecognized prior service credit
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
|||
Net amortization of actuarial losses
|
15
|
|
|
96
|
|
|
111
|
|
|||
Net periodic defined benefit pension cost
|
$
|
496
|
|
|
$
|
884
|
|
|
$
|
1,380
|
|
|
Six Months Ended Aug 3, 2019
|
||||||||||
|
SERP
|
|
Foreign Pension Plans
|
|
Total
|
||||||
Service cost
|
$
|
—
|
|
|
$
|
1,615
|
|
|
$
|
1,615
|
|
Interest cost
|
962
|
|
|
135
|
|
|
1,097
|
|
|||
Expected return on plan assets
|
—
|
|
|
(155
|
)
|
|
(155
|
)
|
|||
Net amortization of unrecognized prior service credit
|
—
|
|
|
(19
|
)
|
|
(19
|
)
|
|||
Net amortization of actuarial losses
|
31
|
|
|
191
|
|
|
222
|
|
|||
Net periodic defined benefit pension cost
|
$
|
993
|
|
|
$
|
1,767
|
|
|
$
|
2,760
|
|
|
Three Months Ended Aug 4, 2018
|
||||||||||
|
SERP
|
|
Foreign Pension Plans
|
|
Total
|
||||||
Service cost
|
$
|
—
|
|
|
$
|
754
|
|
|
$
|
754
|
|
Interest cost
|
472
|
|
|
55
|
|
|
527
|
|
|||
Expected return on plan assets
|
—
|
|
|
(75
|
)
|
|
(75
|
)
|
|||
Net amortization of unrecognized prior service credit
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|||
Net amortization of actuarial losses
|
46
|
|
|
105
|
|
|
151
|
|
|||
Net periodic defined benefit pension cost
|
$
|
518
|
|
|
$
|
832
|
|
|
$
|
1,350
|
|
|
Six Months Ended Aug 4, 2018
|
||||||||||
|
SERP
|
|
Foreign Pension Plans
|
|
Total
|
||||||
Service cost
|
$
|
—
|
|
|
$
|
1,494
|
|
|
$
|
1,494
|
|
Interest cost
|
944
|
|
|
110
|
|
|
1,054
|
|
|||
Expected return on plan assets
|
—
|
|
|
(149
|
)
|
|
(149
|
)
|
|||
Net amortization of unrecognized prior service credit
|
—
|
|
|
(14
|
)
|
|
(14
|
)
|
|||
Net amortization of actuarial losses
|
93
|
|
|
210
|
|
|
303
|
|
|||
Net periodic defined benefit pension cost
|
$
|
1,037
|
|
|
$
|
1,651
|
|
|
$
|
2,688
|
|
(15)
|
Fair Value Measurements
|
|
|
Fair Value Measurements
|
|
Fair Value Measurements
|
||||||||||||||||||||||||||||
|
|
at Aug 3, 2019
|
|
at Feb 2, 2019
|
||||||||||||||||||||||||||||
Recurring Fair Value Measures
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange currency contracts
|
|
$
|
—
|
|
|
$
|
6,912
|
|
|
$
|
—
|
|
|
$
|
6,912
|
|
|
$
|
—
|
|
|
$
|
4,690
|
|
|
$
|
—
|
|
|
$
|
4,690
|
|
Interest rate swap
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,033
|
|
|
—
|
|
|
1,033
|
|
||||||||
Total
|
|
$
|
—
|
|
|
$
|
6,912
|
|
|
$
|
—
|
|
|
$
|
6,912
|
|
|
$
|
—
|
|
|
$
|
5,723
|
|
|
$
|
—
|
|
|
$
|
5,723
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign exchange currency contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
77
|
|
|
$
|
—
|
|
|
$
|
77
|
|
Interest rate swaps
|
|
—
|
|
|
53
|
|
|
—
|
|
|
53
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Deferred compensation obligations
|
|
—
|
|
|
15,554
|
|
|
—
|
|
|
15,554
|
|
|
—
|
|
|
14,405
|
|
|
—
|
|
|
14,405
|
|
||||||||
Total
|
|
$
|
—
|
|
|
$
|
15,607
|
|
|
$
|
—
|
|
|
$
|
15,607
|
|
|
$
|
—
|
|
|
$
|
14,482
|
|
|
$
|
—
|
|
|
$
|
14,482
|
|
(16)
|
Derivative Financial Instruments
|
|
Derivative Balance Sheet Location
|
|
Fair Value at
Aug 3, 2019 |
|
Fair Value at
Feb 2, 2019 |
||||
ASSETS:
|
|
|
|
|
|
|
|
||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||
Cash flow hedges:
|
|
|
|
|
|
||||
Foreign exchange currency contracts
|
Other current assets/
Other assets
|
|
$
|
5,894
|
|
|
$
|
4,058
|
|
Interest rate swap
|
Other assets
|
|
—
|
|
|
1,033
|
|
||
Total derivatives designated as hedging instruments
|
|
|
5,894
|
|
|
5,091
|
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|||
Foreign exchange currency contracts
|
Other current assets
|
|
1,018
|
|
|
632
|
|
||
Total
|
|
|
$
|
6,912
|
|
|
$
|
5,723
|
|
LIABILITIES:
|
|
|
|
|
|
|
|
||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||
Cash flow hedges:
|
|
|
|
|
|
||||
Foreign exchange currency contracts
|
Accrued expenses and other current liabilities
|
|
$
|
—
|
|
|
$
|
77
|
|
Interest rate swap
|
Other long-term liabilities
|
|
53
|
|
|
—
|
|
||
Total
|
|
|
$
|
53
|
|
|
$
|
77
|
|
|
Gains (Losses) Recognized in OCI1
|
|
Location of Gains (Losses) Reclassified from Accumulated OCI into Earnings1
|
|
Gains (Losses) Reclassified from Accumulated OCI into Earnings
|
||||||||||||
|
Three Months Ended
|
|
|
Three Months Ended
|
|||||||||||||
|
Aug 3, 2019
|
|
Aug 4, 2018
|
|
|
Aug 3, 2019
|
|
Aug 4, 2018
|
|||||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign exchange currency contracts
|
$
|
3,063
|
|
|
$
|
4,638
|
|
|
Cost of product sales
|
|
$
|
1,757
|
|
|
$
|
(2,342
|
)
|
Interest rate swap
|
(777
|
)
|
|
37
|
|
|
Interest expense
|
|
44
|
|
|
31
|
|
|
Gains (Losses) Recognized in OCI1
|
|
Location of Gain (Loss) Reclassified from Accumulated OCI into Earnings1
|
|
Gains (Losses) Reclassified from Accumulated OCI into Earnings
|
||||||||||||
|
Six Months Ended
|
|
|
Six Months Ended
|
|||||||||||||
|
Aug 3, 2019
|
|
Aug 4, 2018
|
|
|
Aug 3, 2019
|
|
Aug 4, 2018
|
|||||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign exchange currency contracts
|
$
|
7,718
|
|
|
$
|
12,060
|
|
|
Cost of product sales
|
|
$
|
1,987
|
|
|
$
|
(4,028
|
)
|
Foreign exchange currency contracts
|
—
|
|
|
2
|
|
|
Other income (expense)
|
|
—
|
|
|
(201
|
)
|
||||
Interest rate swap
|
(996
|
)
|
|
105
|
|
|
Interest expense
|
|
90
|
|
|
39
|
|
1
|
During the first quarter of fiscal 2020, the Company adopted new authoritative guidance which eliminated the requirement to separately measure and report ineffectiveness for instruments that qualify for hedge accounting and generally requires that the entire change in the fair value of such instruments ultimately be presented in the same line as the respective hedge item. As a result, there is no interest component recognized for the ineffective portion of instruments that qualify for hedge accounting, but rather all changes in the fair value of such instruments are included in other comprehensive income (loss) during the three and six months ended August 3, 2019. Upon adoption of this guidance, the Company reclassified $2.0 million in gains from retained earnings to accumulated other comprehensive loss related to the previously recorded interest component on outstanding instruments that qualified for hedge accounting. During the three and six months ended August 4, 2018, the Company recognized gains of $0.8 million and $1.4 million, respectively, resulting from the ineffective portion related to foreign exchange currency contracts in interest income. There was no ineffectiveness recognized related to the interest rate swap during the three and six months ended August 4, 2018.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
Aug 3, 2019
|
|
Aug 4, 2018
|
|
Aug 3, 2019
|
|
Aug 4, 2018
|
||||||||
Beginning balance gain (loss)
|
$
|
8,663
|
|
|
$
|
(6,285
|
)
|
|
$
|
2,999
|
|
|
$
|
(14,369
|
)
|
Cumulative adjustment from adoption of new accounting guidance1
|
—
|
|
|
—
|
|
|
1,981
|
|
|
—
|
|
||||
Net gains from changes in cash flow hedges
|
1,978
|
|
|
4,111
|
|
|
5,842
|
|
|
10,579
|
|
||||
Net (gains) losses reclassified into earnings
|
(1,572
|
)
|
|
2,032
|
|
|
(1,753
|
)
|
|
3,648
|
|
||||
Ending balance gain (loss)
|
$
|
9,069
|
|
|
$
|
(142
|
)
|
|
$
|
9,069
|
|
|
$
|
(142
|
)
|
1
|
During the first quarter of fiscal 2020, the Company adopted new authoritative guidance which eliminated the requirement to separately measure and report ineffectiveness for instruments that qualify for hedge accounting and generally requires that the entire change in the fair value of such instruments ultimately be presented in the same line as the respective hedge item. As a result, there is no interest component recognized for the ineffective portion of instruments that qualify for hedge accounting, but rather all changes in the fair value of such instruments are included in other comprehensive income (loss) during the three and six months ended August 3, 2019. Upon adoption of this guidance, the Company reclassified $2.0 million in gains from retained earnings to accumulated other comprehensive loss related to the previously recorded interest component on outstanding instruments that qualified for hedge accounting.
|
|
Location of Gain Recognized in Earnings
|
|
Gain Recognized in Earnings
|
||||||||||||||
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||||||
|
|
Aug 3, 2019
|
|
Aug 4, 2018
|
|
Aug 3, 2019
|
|
Aug 4, 2018
|
|||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange currency contracts
|
Other income (expense)
|
|
$
|
233
|
|
|
$
|
2,216
|
|
|
$
|
808
|
|
|
$
|
5,906
|
|
(17)
|
Subsequent Events
|
ITEM 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
Total net revenue increased 5.8% to $683.2 million for the quarter ended August 3, 2019, compared to $645.9 million in the same prior-year quarter. In constant currency, net revenue increased by 8.8%.
|
•
|
Gross margin (gross profit as a percentage of total net revenue) increased 180 basis points to 38.9% for the quarter ended August 3, 2019, compared to 37.1% in the same prior-year period.
|
•
|
Selling, general and administrative (“SG&A”) expenses as a percentage of total net revenue (“SG&A rate”) increased 30 basis points to 32.0% for the quarter ended August 3, 2019, compared to 31.7% in the same prior-year period. SG&A expenses increased 6.7% to $218.2 million for the quarter ended August 3, 2019, compared to $204.6 million in the same prior-year period.
|
•
|
During the quarter ended August 3, 2019, the Company recognized asset impairment charges of $1.5 million, compared to $3.0 million in the same prior-year period.
|
•
|
Operating margin increased 180 basis points to 6.7% for the quarter ended August 3, 2019, compared to 4.9% in the same prior-year period. Lower asset impairment charges favorably impacted operating margin by 30 basis points during the quarter ended August 3, 2019 compared to the same prior-year period. Lower expenses related to certain professional service and legal fees and related costs favorably impacted operating margin by 20 basis points during the quarter ended August 3, 2019 compared to the same prior-year period. Earnings from operations increased 44.2% to $46.0 million for the quarter ended August 3, 2019, compared to $31.9 million in the same prior-year period.
|
•
|
Other expense, net (including interest income and expense), totaled $11.0 million for the quarter ended August 3, 2019, compared to other income, net, of $1.6 million in the same prior-year period.
|
•
|
The effective income tax rate increased by 200 basis points to 25.2% for the quarter ended August 3, 2019, compared to 23.2% in the same prior-year period.
|
•
|
The Company had $131.1 million in cash and cash equivalents and $0.5 million in restricted cash as of August 3, 2019, compared to $219.1 million in cash and cash equivalents and $0.4 million in restricted cash at August 4, 2018.
|
◦
|
During fiscal 2019, the Company recognized charges of €39.8 million ($45.6 million) for a fine imposed by the European Commission related to alleged violations of European Union competition rules by the Company. The Company paid the full amount of the fine during the three months ended May 4, 2019.
|
◦
|
In April 2019, the Company issued $300 million aggregate principal amount of 2.00% convertible senior notes due 2024 in a private offering, for which it received total cash proceeds of $296.2 million, net of the initial purchasers’ discounts and commissions and offering costs of $3.8 million. In connection with the issuance of these notes, the Company (i) entered into convertible note hedge transactions for which it paid an aggregate $61.0 million and (ii) sold warrants for which it received aggregate proceeds of $28.1 million. These transactions are intended to reduce the potential dilution with respect to the Company’s common stock upon conversion of the notes and/or offset any cash payments the Company may be required to make in excess of the principal amount of the converted notes.
|
◦
|
During the three months ended May 4, 2019, the Company used $170 million of proceeds from its convertible senior notes to enter into an ASR, pursuant to which it received up front approximately 5.2 million shares (representing approximately $102 million (or 60%) of the $170 million notional amount of the ASR), with the remaining portion settled in September 2019. During the six months ended August 3, 2019, the Company also repurchased
|
◦
|
The Company, through its European subsidiaries, maintains short-term committed and uncommitted borrowing agreements, primarily for working capital purposes, with various banks in Europe. The Company had $27.8 million in outstanding borrowings as of August 3, 2019 and no outstanding borrowings as of August 4, 2018.
|
•
|
Accounts receivable consists of trade receivables relating primarily to the Company’s wholesale business in Europe and, to a lesser extent, to its wholesale businesses in the Americas and Asia, royalty receivables relating to its licensing operations, credit card and retail concession receivables related to its retail businesses and certain other receivables. Accounts receivable increased by $9.6 million, or 3.4%, to $293.0 million as of August 3, 2019, compared to $283.4 million at August 4, 2018. On a constant currency basis, accounts receivable increased by $20.1 million, or 7.1%, when compared to August 4, 2018.
|
•
|
Inventory increased by $19.7 million, or 4.2%, to $484.2 million as of August 3, 2019, compared to $464.5 million at August 4, 2018. On a constant currency basis, inventory increased by $33.4 million, or 7.2%, when compared to August 4, 2018.
|
•
|
During the first quarter of fiscal 2020, the Company adopted a comprehensive new lease standard which superseded previous lease guidance. The standard requires a lessee to recognize an asset related to the right to use the underlying asset and a liability that approximates the present value of the lease payments over the term of contracts that qualify as leases under the new guidance. As of August 3, 2019, the operating lease right-of-use assets totaled $900.1 million and the operating lease liabilities totaled $961.7 million. Refer to “Part I, Item 1. Financial Statements – Note 2– Lease Accounting” for further information.
|
|
|
Stores
|
|
Concessions
|
||||||||||||||
Region
|
|
Total
|
|
Directly Operated
|
|
Partner Operated
|
|
Total
|
|
Directly Operated
|
|
Partner Operated
|
||||||
United States
|
|
287
|
|
|
285
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Canada
|
|
80
|
|
|
80
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Central and South America
|
|
111
|
|
|
71
|
|
|
40
|
|
|
27
|
|
|
27
|
|
|
—
|
|
Total Americas
|
|
478
|
|
|
436
|
|
|
42
|
|
|
28
|
|
|
27
|
|
|
1
|
|
Europe and the Middle East
|
|
726
|
|
|
510
|
|
|
216
|
|
|
37
|
|
|
37
|
|
|
—
|
|
Asia and the Pacific
|
|
520
|
|
|
216
|
|
|
304
|
|
|
337
|
|
|
162
|
|
|
175
|
|
Total
|
|
1,724
|
|
|
1,162
|
|
|
562
|
|
|
402
|
|
|
226
|
|
|
176
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
Aug 3, 2019
|
|
Aug 4, 2018
|
|
$ Change
|
|
% Change
|
|||||||
Net revenue:
|
|
|
|
|
|
|
|
|||||||
Americas Retail
|
$
|
198,966
|
|
|
$
|
197,125
|
|
|
$
|
1,841
|
|
|
0.9
|
%
|
Americas Wholesale
|
41,902
|
|
|
34,253
|
|
|
7,649
|
|
|
22.3
|
%
|
|||
Europe
|
340,509
|
|
|
311,998
|
|
|
28,511
|
|
|
9.1
|
%
|
|||
Asia
|
83,301
|
|
|
82,786
|
|
|
515
|
|
|
0.6
|
%
|
|||
Licensing
|
18,542
|
|
|
19,709
|
|
|
(1,167
|
)
|
|
(5.9
|
%)
|
|||
Total net revenue
|
$
|
683,220
|
|
|
$
|
645,871
|
|
|
$
|
37,349
|
|
|
5.8
|
%
|
Earnings (loss) from operations:
|
|
|
|
|
|
|
|
|||||||
Americas Retail
|
$
|
5,957
|
|
|
$
|
5,582
|
|
|
$
|
375
|
|
|
6.7
|
%
|
Americas Wholesale
|
8,422
|
|
|
5,325
|
|
|
3,097
|
|
|
58.2
|
%
|
|||
Europe
|
51,594
|
|
|
30,531
|
|
|
21,063
|
|
|
69.0
|
%
|
|||
Asia
|
(4,800
|
)
|
|
1,634
|
|
|
(6,434
|
)
|
|
(393.8
|
%)
|
|||
Licensing
|
15,547
|
|
|
17,437
|
|
|
(1,890
|
)
|
|
(10.8
|
%)
|
|||
Total segment earnings from operations
|
76,720
|
|
|
60,509
|
|
|
16,211
|
|
|
26.8
|
%
|
|||
Corporate overhead
|
(29,229
|
)
|
|
(25,647
|
)
|
|
(3,582
|
)
|
|
14.0
|
%
|
|||
Asset impairment charges
|
(1,504
|
)
|
|
(2,981
|
)
|
|
1,477
|
|
|
(49.5
|
%)
|
|||
Total earnings from operations
|
$
|
45,987
|
|
|
$
|
31,881
|
|
|
$
|
14,106
|
|
|
44.2
|
%
|
|
|
|
|
|
|
|
|
|||||||
Operating margins:
|
|
|
|
|
|
|
|
|||||||
Americas Retail
|
3.0
|
%
|
|
2.8
|
%
|
|
|
|
|
|||||
Americas Wholesale
|
20.1
|
%
|
|
15.5
|
%
|
|
|
|
|
|||||
Europe
|
15.2
|
%
|
|
9.8
|
%
|
|
|
|
|
|||||
Asia
|
(5.8
|
%)
|
|
2.0
|
%
|
|
|
|
|
|||||
Licensing
|
83.8
|
%
|
|
88.5
|
%
|
|
|
|
|
|||||
Total Company
|
6.7
|
%
|
|
4.9
|
%
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|||||||||
|
Aug 3, 2019
|
|
Aug 4, 2018
|
|
Change
|
|
% Change
|
|||||||
Net revenue:
|
|
|
|
|
|
|
|
|||||||
Americas Retail
|
$
|
375,389
|
|
|
$
|
368,465
|
|
|
$
|
6,924
|
|
|
1.9
|
%
|
Americas Wholesale
|
88,107
|
|
|
74,932
|
|
|
13,175
|
|
|
17.6
|
%
|
|||
Europe
|
550,564
|
|
|
517,433
|
|
|
33,131
|
|
|
6.4
|
%
|
|||
Asia
|
168,491
|
|
|
166,837
|
|
|
1,654
|
|
|
1.0
|
%
|
|||
Licensing
|
37,360
|
|
|
39,493
|
|
|
(2,133
|
)
|
|
(5.4
|
%)
|
|||
Total net revenue
|
$
|
1,219,911
|
|
|
$
|
1,167,160
|
|
|
$
|
52,751
|
|
|
4.5
|
%
|
Earnings (loss) from operations:
|
|
|
|
|
|
|
|
|||||||
Americas Retail
|
$
|
4,145
|
|
|
$
|
(98
|
)
|
|
$
|
4,243
|
|
|
4,329.6
|
%
|
Americas Wholesale
|
16,236
|
|
|
11,351
|
|
|
4,885
|
|
|
43.0
|
%
|
|||
Europe
|
35,267
|
|
|
10,198
|
|
|
25,069
|
|
|
245.8
|
%
|
|||
Asia
|
(8,003
|
)
|
|
5,699
|
|
|
(13,702
|
)
|
|
(240.4
|
%)
|
|||
Licensing
|
32,191
|
|
|
34,923
|
|
|
(2,732
|
)
|
|
(7.8
|
%)
|
|||
Total segment earnings from operations
|
79,836
|
|
|
62,073
|
|
|
17,763
|
|
|
28.6
|
%
|
|||
Corporate overhead
|
(55,041
|
)
|
|
(51,492
|
)
|
|
(3,549
|
)
|
|
6.9
|
%
|
|||
Asset impairment charges
|
(3,279
|
)
|
|
(3,740
|
)
|
|
461
|
|
|
(12.3
|
%)
|
|||
Net gains on lease terminations
|
—
|
|
|
152
|
|
|
(152
|
)
|
|
(100.0
|
%)
|
|||
Total earnings from operations
|
$
|
21,516
|
|
|
$
|
6,993
|
|
|
$
|
14,523
|
|
|
207.7
|
%
|
Operating margins:
|
|
|
|
|
|
|
|
|||||||
Americas Retail
|
1.1
|
%
|
|
(0.0
|
%)
|
|
|
|
|
|||||
Americas Wholesale
|
18.4
|
%
|
|
15.1
|
%
|
|
|
|
|
|||||
Europe
|
6.4
|
%
|
|
2.0
|
%
|
|
|
|
|
|||||
Asia
|
(4.7
|
%)
|
|
3.4
|
%
|
|
|
|
|
|||||
Licensing
|
86.2
|
%
|
|
88.4
|
%
|
|
|
|
|
|||||
Total Company
|
1.8
|
%
|
|
0.6
|
%
|
|
|
|
|
ITEM 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
ITEM 1.
|
Legal Proceedings.
|
•
|
increasing our vulnerability to adverse economic and industry conditions;
|
•
|
limiting our ability to obtain additional financing;
|
•
|
requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes;
|
•
|
limiting our flexibility to plan for, or react to, changes in our business;
|
•
|
diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon conversion of the Notes; and
|
•
|
placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital.
|
•
|
our cash requirements or plans might change for a wide variety of reasons, including changes in our financial position, capital allocation plans (including a desire to retain or accumulate cash), capital spending plans, stock purchase plans, acquisition strategies, strategic initiatives, debt payment plans (including a desire to maintain or improve credit ratings on our debt securities), pension funding or other benefits payments;
|
•
|
our ability to service and refinance our current and future indebtedness and our ability to borrow or raise additional capital to satisfy our capital needs;
|
•
|
the amount of dividends that we may distribute to our shareholders is subject to restrictions under applicable law and restrictions imposed by our existing or future credit facilities, debt securities,
|
•
|
the amount of cash that our subsidiaries may make available to us, whether by dividends, loans or other payments, may be subject to the legal, regulatory and contractual restrictions in our outstanding indebtedness.
|
ITEM 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Period
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs1
|
||||||
May 5, 2019 to June 1, 2019
|
|
|
|
|
|
|
|
||||||
Repurchase program2
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
105,137,922
|
|
|
Employee transactions3
|
139
|
|
|
$
|
19.75
|
|
|
—
|
|
|
|
||
June 2, 2019 to July 6, 2019
|
|
|
|
|
|
|
|
||||||
Repurchase program2
|
749,252
|
|
|
$
|
14.67
|
|
|
749,252
|
|
|
$
|
94,149,167
|
|
Employee transactions3
|
1,365
|
|
|
$
|
15.73
|
|
|
—
|
|
|
|
||
July 7, 2019 to August 3, 2019
|
|
|
|
|
|
|
|
||||||
Repurchase program2
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
94,149,167
|
|
|
Employee transactions3
|
2,000
|
|
|
$
|
16.33
|
|
|
—
|
|
|
|
||
Total
|
|
|
|
|
|
|
|
||||||
Repurchase program2
|
749,252
|
|
|
$
|
14.67
|
|
|
749,252
|
|
|
|
||
Employee transactions3
|
3,504
|
|
|
$
|
16.23
|
|
|
—
|
|
|
|
1
|
On April 26, 2019, pursuant to existing stock repurchase authorizations, the Company entered into an accelerated share repurchase agreement (the “ASR Contract”) with JPMorgan Chase Bank, National Association (the “ASR Counterparty”) to repurchase an aggregate of $170 million of the Company’s common stock. Upon the terms of the ASR Contract, the Company made an initial payment of $170 million to the ASR Counterparty and received an initial delivery of 5.2 million shares of common stock, which represented approximately $102 million (or 60%) of the ASR Contract. The remaining balance of $68 million was classified as an equity forward contract and has reduced the maximum dollar value of shares that may yet be purchased under the Company’s repurchase program. The equity forward contract was settled in September 2019. Refer to “Part I, Item 1. Financial Statements – Note 4 – Stockholders’ Equity – Share Repurchase Program” for further information.
|
2
|
On June 26, 2012, the Company’s Board of Directors authorized a program to repurchase, from time-to-time and as market and business conditions warrant, up to $500 million of the Company’s common stock. Repurchases under the program may be made on the open market or in privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means. There is no minimum or maximum number of shares to be repurchased under the program, which may be discontinued at any time, without prior notice.
|
3
|
Consists of shares surrendered to, or withheld by, the Company in satisfaction of employee tax withholding obligations that occur upon vesting of restricted stock awards/units granted under the Company’s 2004 Equity Incentive Plan, as amended.
|
ITEM 6.
|
Exhibits.
|
Exhibit
Number
|
|
Description
|
3.1.
|
|
|
3.2.
|
|
|
4.1.
|
|
|
4.2.
|
|
|
|
||
|
||
|
||
|
||
|
||
†101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
†101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
†101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
†101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
†101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
†101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
†104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
*
|
Management Contract or Compensatory Plan
|
†
|
Filed herewith
|
††
|
Furnished herewith
|
|
|
Guess?, Inc.
|
|
|
|
|
|
Date:
|
September 5, 2019
|
By:
|
/s/ CARLOS ALBERINI
|
|
|
|
Carlos Alberini
|
|
|
|
Chief Executive Officer
|
|
|
|
|
Date:
|
September 5, 2019
|
By:
|
/s/ SANDEEP REDDY
|
|
|
|
Sandeep Reddy
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
1.
|
Definitions; Incorporation of Plan Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan. This Award and all rights of the Grantee under this Agreement are subject to, and the Grantee agrees to be bound by, all of the terms and conditions of the Plan, incorporated herein by this reference. Except as specifically provided in this Agreement, in the event of any conflict or inconsistency between the Plan and this Agreement, the Plan shall govern.
|
2.
|
Grant of Restricted Stock Units. The Company hereby grants to the Grantee as of the Date of Grant (set forth above) a right to receive 205,339 shares of the Company’s common stock subject to the terms, conditions, and restrictions set forth herein (the “Restricted Stock Units”). As used herein, the term “Restricted Stock Unit” shall mean a non-voting unit of measurement which is deemed for bookkeeping purposes to be equivalent to one outstanding share of the Company’s common stock, par value $0.01 per share (the “Common Stock”) solely for purposes of the Plan and this Agreement. The Restricted Stock Units shall be used solely as a device for the determination of the number of shares of Common Stock to eventually be delivered to the Grantee if such Restricted Stock Units vest pursuant to this Agreement. The Restricted Stock Units shall not be treated as property or as a trust fund of any kind. The Grantee shall have no rights as a shareholder of the Company, no dividend rights (except as expressly provided in Section 4 with respect to Dividend Equivalent Rights) and no voting rights with respect to the Restricted Stock Units and any shares of Common Stock underlying or issuable in respect of such Restricted Stock Units (“Award Shares”) until such shares of Common Stock are actually issued to and held of record by the Grantee. This Award is in complete satisfaction of the Grantee’s right, if any, to receive equity-based awards from the Company with respect to the Company’s 2020 fiscal year.
|
3.
|
Vesting.
|
A.
|
If both the Licensing Segment Earnings from Operations Threshold and the Earnings from Operations Threshold (each as determined pursuant to Section 3(B)) are achieved for the Performance Period then, except as otherwise expressly provided in Sections 7 and 8 herein, this Award shall vest as to (i) one-third of the Restricted Stock Units on January 30, 2020 (the “First Tranche”), (ii) one-third of the Restricted Stock Units on January 30, 2021 (the “Second Tranche”), and (iii) one-third of the Restricted Stock Units on January 30, 2022 (the “Third Tranche”); provided that Grantee has been continuously in Service with the Company from the Date of Grant through each applicable vesting date. If either (but not both) the Licensing Segment Earnings from Operations Threshold or the Earnings from Operations Threshold (each as determined pursuant to Section 3(B)) is achieved for the Performance Period then, except as otherwise
|
B.
|
No portion of this Award shall vest notwithstanding satisfaction of the continued Service requirement for vesting described in Section 3(A) above unless the Committee certifies, following the end of the Company’s 2020 fiscal year, that the Company achieved (i) Licensing Segment Earnings from Operations (as defined below) for the Company’s 2020 fiscal year (the “Performance Period”) equal to or above the level established by the Committee with respect to the Award in connection with the grant of the Award (the “Licensing Segment Earnings from Operations Threshold”) or (ii) Earnings from Operations (as defined below) for the Performance Period equal to or above the level established by the Committee with respect to the Award in connection with the grant of the Award (the “Earnings from Operations Threshold”); provided, however, that if either a Change in Control or the death or Disability (as defined below) of the Grantee occurs before the last day of the Performance Period, the performance requirement of this Section 3(B) shall be deemed met as of the date of such event. If both the Licensing Segment Earnings from Operations Threshold and the Earnings from Operations Threshold are not met for the Performance Period (and no such Change in Control, death or Disability occurs before the last day of the Performance Period), this Award and the Restricted Stock Units subject hereto shall terminate and be cancelled as of the last day of the Performance Period. If either (but not both) the Licensing Segment Earnings from Operations Threshold or the Earnings from Operations Threshold is not met for the Performance Period (and no such Change in Control, death or Disability occurs before the last day of the Performance Period), fifty percent (50%) of the total number of Restricted Stock Units subject to this Award (rounded to the nearest whole number) shall terminate and be cancelled as of the last day of the Performance Period.
|
C.
|
For purposes of this Award, “Disabled” and “Disability” shall (i) have the meaning defined under the Company’s then-current long-term disability insurance plan, policy, program or contract as entitles the Grantee to payment of disability benefits thereunder, or (ii) if there shall be no such plan, policy, program or contract, mean permanent and total disability as defined in Section 22(e)(3) of the Code.
|
4.
|
Dividend Equivalents. If a cash dividend is paid with respect to the Common Stock while any Restricted Stock Units subject to the Award are outstanding, the Grantee shall be credited with an amount in cash equal to the dividends the Grantee would have received if he had been the owner of the shares of Common Stock subject to such outstanding Restricted Stock Units; provided, however, that no amount shall be credited with respect to shares that have been delivered to the Grantee as of the applicable dividend record date. Any amounts credited under this Section 4 (“Dividend Equivalents”) shall be subject to the same terms and conditions as the Restricted Stock Units to which they relate and shall vest and be paid (or, if applicable, be forfeited) at the same time as the Restricted Stock Units to which they relate.
|
5.
|
Delivery of Shares. Except as otherwise provided in Section 8 below with respect to a Change in Control, the Company shall deliver or cause to be delivered to the Grantee the number of Award Shares subject to the First Tranche that vest pursuant to the terms hereof within ten days following certification by the Committee of the satisfaction of the performance criteria set forth in Section 3(B) (and in no event later than 74 days following the end of the Performance Period), the number of Award Shares subject to the Second Tranche that vest pursuant to the terms hereof on (or within three business days following) January 30, 2020 and the number of Award Shares subject to the Third Tranche that vest pursuant to the terms hereof on (or within three business days following) January 30, 2021. Any Dividend Equivalents described in Section 4 above related to such Award Shares shall be paid in cash at the same time as the delivery of the Award Shares under this Section 5. Notwithstanding the foregoing, in the event of the Grantee’s death or Disability (as such term is defined for purposes of Section 409A of the Code), then such shares shall be settled as soon as administratively practicable after (and in all events within 90 days after) such event.
|
6.
|
Adjustments Upon Specified Events. Upon the occurrence of certain events relating to the Company’s Common Stock contemplated by Section 16(b) of the Plan, the Committee will make adjustments, if appropriate, in the number of Restricted Stock Units and the number and kind of securities subject to the Award.
|
7.
|
Effect of Certain Cessations of Service. The continued Service vesting requirement set forth under Section 3(A) of this Award shall be deemed to be satisfied, and any then-outstanding Restricted Stock Units shall be deemed vested, in the event of the Grantee’s Disability or death while in Service. For purposes of clarity, any Restricted Stock Units that vest pursuant to the preceding sentence shall still be paid at the applicable time set forth in Section 5. If the Grantee’s Service terminates for any other reason, this Award and the Restricted Stock Units subject hereto, to the extent outstanding and unvested as of the date of such termination of Service, shall terminate and be cancelled as of the date of such termination of Service. Sections 14(a) and 14(b) of the Plan shall not apply to the Award.
|
8.
|
Change in Control. Notwithstanding anything to the contrary in Section 3, Section 5 or Section 7 of this Agreement or any provision of the Plan, the following provisions shall apply upon a Change in Control:
|
A.
|
If a Change in Control occurs and the then-outstanding and unvested portion of this Award is not continued following such event or assumed or converted into restricted stock units of any successor entity to the Company or a parent thereof (the “Successor Entity”), the continued Service vesting requirement set forth under Section 3(A) of this Award shall be deemed to be satisfied, the outstanding Restricted Stock Units subject to such portion shall be deemed vested, and such Restricted Stock Units shall be settled at the time(s) otherwise provided in Section 5; provided that if such Change in Control constitutes a “change in the ownership or effective control” of the Company, or a change “in the ownership of a substantial portion of the assets” of the Company within the meaning of Section 409A of the Code (a “Section 409A Change in Control”), outstanding and vested Restricted Stock Units (including any that vest pursuant to the foregoing provisions of this sentence) and related Dividend Equivalents shall be settled upon or as soon as practicable after the date of such Change in Control to the extent such acceleration of payment can be made in accordance with Treas. Reg. §1.409A-3(j)(4)(ix) (or other exemption from the general prohibitions on accelerations of payments under Section 409A of the Code) and not result in any tax, penalty or interest under Section 409A of the Code. In connection with any such Change in Control where payment of outstanding Restricted Stock Units subject to the Award will not be made in connection with the Change in Control, the Committee may make provision for such Restricted Stock Units to become payable in cash based on the Fair Market Value of a share of Common Stock at the time of such Change in Control (with interest for the period from the date of such Change in Control to the applicable payment date at such rate as determined by the Committee based on the interest earned by interest bearing, FDIC insured deposits) as opposed to being payable in securities.
|
B.
|
If the then-outstanding and unvested portion of this Award is continued following such event or is assumed or converted into restricted stock units of any Successor Entity, the continued Service requirement set forth in Section 3(A) above (and the accelerated vesting provisions set forth in Section 7 above) shall continue to apply following such Change in Control, and any portion of the Award that vests pursuant to such provisions shall be settled as provided in Section 5 of this Agreement.
|
9.
|
Restrictions on Transfer. The Grantee may not sell, assign, transfer, pledge, encumber or otherwise alienate, hypothecate or dispose of this Award or the Grantee’s right hereunder to receive Award Shares, except as otherwise provided in the Committee’s sole discretion consistent with the Plan and applicable securities laws.
|
10.
|
Taxes.
|
A.
|
The settlement of this Award is conditioned on the Grantee making arrangements reasonably satisfactory to the Company for the withholding of all applicable federal, state, local or foreign taxes as may be required under applicable law.
|
B.
|
It is intended that any amounts payable under this Agreement shall either be exempt from or comply with Section 409A of the Code (including the Treasury regulations and other published
|
C.
|
If the Grantee is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of the Grantee’s “separation from service” (as such term is defined for purposes of Code Section 409A), the Grantee shall not be entitled to any payment or benefit pursuant to this Award until the earlier of (i) the date which is six (6) months after the Grantee’s separation from service for any reason other than death, or (ii) the date of the Grantee’s death. The provisions of this Section 10(C) shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Code Section 409A. Any amounts otherwise payable to the Grantee upon or in the six (6) month period following the Grantee’s separation from service that are not so paid by reason of this Section 10(C) shall be paid (without interest, except as otherwise provided for in Section 8(A)) as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after the Grantee’s separation from service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of the Grantee’s death). For avoidance of doubt, Dividend Equivalents under Section 4 shall continue to be credited during the period of such six-month delay until the vested Restricted Stock Units are actually settled.
|
11.
|
Compliance. The Grantee hereby agrees to cooperate with the Company, regardless of Grantee’s employment status with the Company, to the extent necessary for the Company to comply with applicable state and federal laws and regulations relating to the Restricted Stock Units.
|
12.
|
Notices. Any notice required or permitted under this Agreement shall be deemed given when personally delivered, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, to the Grantee either at the address on record with the Company or such other address as may be designated by Grantee in writing to the Company; or to the Company, Attention: Stock Plan Administration, 1444 South Alameda Street, Los Angeles, California 90021, or such other address as the Company may designate in writing to the Grantee.
|
13.
|
Failure to Enforce Not a Waiver. The failure of the Company or the Grantee to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.
|
14.
|
Governing Law. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to Delaware or other laws that might cause other law to govern under applicable principles of conflicts of law. For purposes of litigating any dispute that arises under this Agreement, the parties hereby submit to and consent to the jurisdiction of the State of California, and agree that such litigation shall be conducted in the courts of Los Angeles County, or the federal courts for the United States for the Central District of California, and no other courts, where this Agreement is made and/or to be performed.
|
15.
|
Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to the Restricted Stock Units awarded under the Plan or future restricted stock or restricted stock units that may be awarded under the Plan by electronic means or request Grantee’s consent to participate in the Plan by electronic means. Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
|
16.
|
Severability. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
|
17.
|
Amendments. This Agreement may be amended or modified at any time by an instrument in writing signed by both parties.
|
18.
|
Agreement Not a Contract of Employment. Neither the grant of the Restricted Stock Units, this Agreement nor any other action taken in connection herewith shall constitute or be evidence of any agreement or understanding, express or implied, that the Grantee is an employee of the Company or any subsidiary of the Company.
|
19.
|
Committee’s Powers. No provision contained in this Agreement shall in any way terminate, modify or alter, or be construed or interpreted as terminating, modifying or altering any of the powers, rights or authority vested in the Committee or, to the extent delegated, in its delegate pursuant to the terms of the Plan or resolutions adopted in furtherance of the Plan, including, without limitation, the right to make certain determinations and elections with respect to the Restricted Stock Units.
|
20.
|
Termination of this Agreement. Upon termination of this Agreement, all rights of the Grantee hereunder shall cease.
|
21.
|
Clawback Policy. This Award is subject to the terms of the Company’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of the Award or any shares of Common Stock or other cash or property received with respect to the Award (including any value received from a disposition of the shares acquired in respect of the Award).
|
1.
|
I have reviewed this annual on Form 10-K of Guess?, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
September 5, 2019
|
By:
|
/s/ CARLOS ALBERINI
|
|
|
|
Carlos Alberini
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Guess?, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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September 5, 2019
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By:
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/s/ SANDEEP REDDY
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|
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Sandeep Reddy
Chief Financial Officer
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•
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the Quarterly Report on Form 10-Q of the Company for the period ended August 3, 2019, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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•
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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September 5, 2019
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By:
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/s/ CARLOS ALBERINI
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|
|
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Carlos Alberini
Chief Executive Officer
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•
|
the Quarterly Report on Form 10-Q of the Company for the period ended August 3, 2019, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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•
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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September 5, 2019
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By:
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/s/ SANDEEP REDDY
|
|
|
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Sandeep Reddy
Chief Financial Officer
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