bebe stores, inc. Announces Record Fourth Quarter Earnings of $0.24 per share.BRISBANE Brisbane (brĭz`bən), city (1991 pop. 1,145,537), capital of Queensland, E Australia, on the Brisbane River above its mouth on Moreton Bay. , Calif. -- bebe stores bebe stores (pronounced bee-bee) is an American clothing retailer founded in 1976 by the Iranian-born Manny Mashouf, who emigrated to the United States in the early 70s and opened the first bebe store in San Francisco. "Bebe" is the Persian word for "queen. , inc. (Nasdaq:BEBE Bebe, Bèbè, or BeBe may refer to:
Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the fourth quarter of fiscal 2006 were $152.2 million, up 11.2% from $136.9 million reported for the fourth quarter a year ago. As previously reported, same store sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of for the thirteen-week period ended July 1, 2006 increased 3.5% compared to an increase of 34.2% in the prior year. Gross margin as a percentage of net sales decreased to 50.5% in the fourth quarter of fiscal 2006, compared to 51.0% in the fourth quarter of fiscal 2005. The decrease in gross margin as a percentage of net sales from the prior year of 0.5% was primarily due to higher occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy expense. SG&A expenses for the fourth quarter of fiscal 2006 were $47.9 million, or 31.5% of net sales, compared to $40.4 million, or 29.5% of net sales for the same period of the prior year. The increase in SG&A expenses as a percent of sales is primarily due to a $2.8 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge, or 1.8% of net sales, related to both the expensing of stock based compensation as a result of the adoption of Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). Statement No. 123(R) "Share Based Payment" ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123(R)") and a negotiated legal settlement. The increase in SG&A expenses is also due to an increase in advertising expenses offset by lower compensation and variable expenses. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the fourth quarter of fiscal 2006 was $29.0 million or 19.0% of net sales, compared to $29.4 million or 21.5% of net sales for the same period of the prior year. Net earnings for the fourth quarter increased to $22.1 million from $19.5 million for the same period of the prior year. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the fourth quarter were $0.24 after taking into account the $0.02 per share charge related to the expensing of stock based compensation and the negotiated legal settlement versus $0.21 per share in the same period of fiscal 2005, representing a 14.3% increase over the prior year. Had stock based compensation been recorded in the prior year, the impact to diluted earnings per share would have been approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.02 per share as previously disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). . After taking this charge into account, diluted earnings per share would have been $0.19 and the increase in diluted earnings per share from the fourth quarter of fiscal 2005 to the fourth quarter of fiscal 2006 would have been approximately 26%. The effective tax rate for the fourth quarter of fiscal 2006 decreased to 31.4% from 37.8% in the fourth quarter of fiscal 2005 primarily due to an increase in tax exempt interest income and a cumulative adjustment of temporary and permanent differences offset by compensation expense associated with expensing incentive stock options. The effective tax rate is expected to fluctuate from quarter to quarter under SFAS 123(R). Net sales for the fiscal year ended July 1, 2006 were $579.1 million, up 13.7% from $509.5 million reported for the fiscal year ended July 2, 2005. As previously reported, same store sales for the fiscal year ended July 1, 2006 increased 6.1% compared to an increase of 25.7% for the fiscal year ended July 2, 2005. Net earnings for the fiscal year ended July 1, 2006 increased to $74.0 million from $66.3 million for the fiscal year ended July 2, 2005. Diluted earnings per share for the fiscal year ended July 1, 2006 were $0.79 after taking into account the $0.06 per share charge related to the expensing of stock based compensation versus $0.71 per share for the fiscal year ended July 2, 2005, representing an 11.3% increase over the prior year. During the fiscal year ended July 1, 2006, the Company opened 31 stores, including 19 bebe stores, nine BEBE SPORT stores and three outlet stores An outlet store or factory outlet is a retail store in which manufacturers sell their stock directly to the public through their own branded stores. The stores can be can be brick and mortar or online. , and closed three stores, including two bebe stores and one BEBE SPORT store resulting in total square footage growth of 15%. For fiscal year 2006, the Company's capital expenditures were approximately $31 million and depreciation expense was $16 million. For the first quarter of fiscal 2007, the Company anticipates comparable store sales will be in the low double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" range and earnings per share in the range of $0.17 to $0.21 versus $0.14 per share in the first quarter of fiscal 2006. The Company is currently anticipating an effective tax rate of 37.0% for the first quarter of fiscal 2007. For the first quarter of fiscal 2007, the Company is currently planning finished goods inventory to increase on a per square foot basis in the range of high single digits to low double digits Double Digits was a pricing game on the American television game show, The Price Is Right. Played from April 20, 1973 through May 18, 1973's show, it was played for a car and used small prizes. higher as compared to the first quarter of fiscal 2006. For fiscal 2007, the Company anticipates opening 50 stores, expanding or relocating nine existing stores and renovating 12 stores resulting in an approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. square footage growth of 18%. The number of planned new stores includes 28 bebe stores, 21 BEBE SPORT stores and one Neda by bebe store. Total capital expenditures for the year are planned at approximately $50 million which will include capital expenditures for new stores, store expansions and renovations, information technology systems and office improvements. bebe stores, inc. will host a conference call today, August 17, 2006 at 1:30 P.M. Pacific Time to discuss fourth quarter results. Interested parties are invited to listen to the conference by calling (888) 241-2232. A replay of the call will be available for approximately one week by calling (800) 642-1687 and using the passcode "2729367". A link to the audio replay will be available on our web site at www.bebe.com following the conference call. bebe stores, inc. designs, develops and produces a distinctive line of contemporary women's apparel and accessories, which it markets under the bebe, BEBE SPORT and bebe O brand names. bebe currently operates 244 stores, of which 184 are bebe stores, 20 are bebe outlet stores and 40 are BEBE SPORT stores. These stores are located in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . In addition, there is an online store at www.bebe.com. The statements in this news release and on our recorded message, other than the historical financial information, contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties that could cause actual results to differ from anticipated results. Wherever used, the words "expect," "plan," "anticipate," "believe" and similar expressions identify forward-looking statements. Any such forward-looking statements are subject to risks and uncertainties and the company's future results of operations could differ materially from historical results or current expectations. Some of these risks include, without limitation, miscalculation mis·cal·cu·late tr. & intr.v. mis·cal·cu·lat·ed, mis·cal·cu·lat·ing, mis·cal·cu·lates To count or estimate incorrectly. mis·cal of the demand for our products, effective management of our growth, decline in comparable store sales performance, ongoing competitive pressures in the apparel industry, changes in the level of consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. or preferences in apparel, loss of key personnel, difficulties in manufacturing, disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. of supply, adverse economic conditions, and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. other factors that may be described in the company's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and/or other filings with the Securities and Exchange Commission. Future economic and industry trends that could potentially impact revenues and profitability are difficult to predict.
bebe stores, inc.
SELECTED BALANCE SHEET DATA
(UNAUDITED)
(Dollars in thousands)
July 1, July 2,
2006 2005
--------- --------
Assets
Cash and equivalents $ 38,656 $ 27,072
Short-term marketable securities 289,015 241,604
Inventories, net 42,151 31,785
Total current assets 389,306 319,607
Property and equipment, net 95,022 77,753
Long-term marketable securities - 2,000
Total assets $500,909 $407,546
Liabilities and Shareholders' Equity
Total current liabilities $ 59,037 $ 43,890
Total liabilities 92,685 74,303
Total shareholders' equity 408,224 333,243
Total liabilities and shareholders' equity $500,909 $407,546
bebe stores, inc.
STATEMENTS OF OPERATIONS
(UNAUDITED)
(Amounts in thousands except per share data and store statistics)
For the Quarters Ended
July 1, July 2,
2006 % 2005 %
--------- ------- --------- -------
Net sales $152,211 100.0 % $136,937 100.0 %
Cost of sales, including
production and occupancy 75,308 49.5 67,097 49.0
--------- ------- --------- -------
Gross margin 76,903 50.5 69,840 51.0
Selling, general and
administrative expenses 47,945 31.5 40,432 29.5
--------- ------- --------- -------
Income from operations 28,958 19.0 29,408 21.5
Interest and other income,
net 3,234 2.1 1,986 1.4
--------- ------- --------- -------
Earnings before income taxes 32,192 21.1 31,394 22.9
Provision for income taxes 10,111 6.6 11,871 8.7
--------- ------- --------- -------
Net earnings $ 22,081 14.5 % $ 19,523 14.2 %
========= ======= ========= =======
Basic earnings per share $ 0.24 $ 0.21
Diluted earnings per share $ 0.24 $ 0.21
Basic weighted average shares
outstanding 91,671 90,835
Diluted weighted average shares
outstanding 93,843 94,850
Number of stores open at
beginning of period 228 206
Number of stores opened during
period 15 10
Number of stores closed during
period 1 2
Number of stores open at end of
period 242 214
Number of stores
expanded/relocated during
period(1) 3 4
Total square footage at end of
period (000's) 881 767
For the Year-to-Date Periods Ended
July 1, July 2,
2006 % 2005 %
--------- ------- --------- -------
Net sales $579,073 100.0 % $509,527 100.0 %
Cost of sales, including
production and occupancy 292,592 50.5 256,560 50.4
--------- ------- --------- -------
Gross margin 286,481 49.5 252,967 49.6
Selling, general and
administrative expenses 181,831 31.4 151,087 29.6
--------- ------- --------- -------
Income from operations 104,650 18.1 101,880 20.0
Interest and other income,
net 10,408 1.8 5,013 1.0
--------- ------- --------- -------
Earnings before income taxes 115,058 19.9 106,893 21.0
Provision for income taxes 41,096 7.1 40,561 8.0
--------- ------- --------- -------
Net earnings $ 73,962 12.8 % $ 66,332 13.0 %
========= ======= ========= =======
Basic earnings per share $ 0.81 $ 0.74
Diluted earnings per share $ 0.79 $ 0.71
Basic weighted average shares
outstanding 91,373 89,591
Diluted weighted average shares
outstanding 93,795 93,453
Number of stores open at
beginning of period 214 199
Number of stores opened during
period 31 21
Number of stores closed during
period 3 6
Number of stores open at end of
period 242 214
Number of stores
expanded/relocated during
period(1) 5 9
Total square footage at end of
period (000's) 881 767
(1) Expanded/Relocated stores are excluded from comparable store
sales for the first year following expansion/relocation.
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