bebe stores, inc. (NASDAQ:BEBE) today announced unaudited financial
results for the fiscal second quarter ended January 4, 2014.
For the second quarter of fiscal 2014:
Net sales were $130.0 million, a decrease of 4.1% from $135.5 million
reported for the second quarter a year ago. Comparable store sales for
the quarter ended January 4, 2014 decreased 1.9% compared to a decrease
of 2.8% in the first quarter of fiscal 2014. The sequential improvement
in sales was driven by improvement in both traffic and conversion.
Gross margin decreased to 33.6% compared to 33.9% in the second quarter
of fiscal 2013. The decrease in gross margin was primarily due to an
increase in markdowns to clear through legacy products as well as
heightened promotional activities throughout the holiday season.
SG&A expenses were $49.3 million, or 37.9% of net sales, compared to
$53.4 million, or 39.4% of net sales, for the same period in the prior
year. The SG&A expenses in the second quarter of fiscal 2014 reflect
planned increases in advertising expenses, decreases in contractor and
professional fees costs, as well as benefited from a $0.5 million legal
settlement. Net loss for the second quarter of fiscal 2014 was $5.5
million, or $0.07 per share, on 79.1 million shares outstanding compared
to net loss of $4.8 million, or $0.06 per share, on 84.1 million shares
outstanding for the same period of the prior year. Note that the fiscal
2014 net loss also reflects the continuing impact of maintaining a
valuation allowance against deferred tax assets and thus our effective
tax rate approximates 0%.
During the quarter ended January 4, 2014, the Company closed two bebe
stores and one 2b bebe store.
Steve Birkhold, Chief Executive Officer, commented, “We are encouraged
by the sequential improvement we experienced in the second quarter,
especially during Black Friday weekend and the month of December.
December continued the sequential improvement with positive comparable
store sales, as we saw a favorable response to the new merchandise and
an increase in traffic, despite declining mall traffic and an aggressive
promotional environment across the industry. We believe that the strong
messaging in our marketing campaigns connected with our customer and
contributed to the improvement in traffic. We also successfully cleared
through the vast majority of legacy merchandise, ending the quarter with
inventory per square foot down nearly 7%. That said, the retail
environment remains challenging, and we will continue to operate with
disciplined inventory management and cost controls. Overall, we believe
we are entering the spring season with an enhanced merchandise
assortment supported by a lean inventory position. Looking ahead, we
remain focused on executing our Six Strategic initiatives to move our
business forward and anticipate continued improvement in comparable
store sales and margin performance. Again, I would like to thank our
shareholders for their support as we continue our work to transform the
business and focus on sustainable growth for the long term.”
For the year-to-date period ending January 4, 2014:
Net sales for the year-to-date period ended January 4, 2014 were $244.1
million, a decrease of 3.4% from $252.6 million for the year-to-date
period ended December 29, 2012. Comparable store sales for the
year-to-date period ended January 4, 2014 decreased 2.3%.
Net loss for the year-to-date period ended January 4, 2014 was $14.6
million compared to net loss of $7.4 million in the prior year. Loss per
share for the year-to-date period ended January 4, 2014 was $0.18 per
share on 79.1 million shares outstanding, compared to a net loss of
$0.09 per share on 84.2 million shares outstanding in the prior year.
Note that the fiscal 2014 net loss also reflects the continuing impact
of maintaining a valuation allowance against deferred tax assets and
thus our effective tax rate approximates 0%.
Balance sheet summary:
Cash and investments at January 4, 2014 were $164 million.
As of January 4, 2014, average finished goods inventory per square foot
decreased approximately 6.8% compared to the prior year.
Capital expenditures for the fiscal year-to-date period were $6.9
million.
Third quarter fiscal 2014 guidance:
For the third quarter of fiscal 2014, the Company expects comparable
store sales to be flat. Gross margin is expected to be higher than the
prior year. We expect net loss per share for the third quarter to be in
the mid-teens range, which is outperforming the third quarter of the
prior year. The expected loss per share range also reflects the
continuing impact of maintaining a valuation allowance against deferred
tax assets or a close to 0% effective tax rate.
Finished goods inventory per square foot as of the end of fiscal third
quarter 2014 is anticipated to decrease in a low single digit range.
Total capital expenditures for the year are anticipated to be
approximately $25 million for new stores, remodels, store expansions,
information technology systems and office improvements.
For the remainder of fiscal year 2014, the Company plans to close up to
six bebe stores and one 2b bebe store, which will result in
approximately an 8% decrease in total store square footage from the end
of fiscal year 2013.
Webcast and Conference call information:
A live audio webcast of bebe stores, inc. second quarter fiscal 2014
earnings release call will be available today at https://event.webcasts.com/starthere.jsp?ei=1028096.
The call begins today at 1:30 P.M. (PT) / 4:30 P.M. (ET). The
webcast will be hosted by Steve Birkhold, Chief Executive Officer, and
Liyuan Woo, Chief Financial Officer.
The financial results and live webcast will be accessible through the
Investor Relations section of the Company’s website at www.bebe.com.
To access the call through a conference line, dial 1-866-893-0531. A
replay of the call will be available for approximately one week by
calling 1-855-859-2056 and entering in conference ID number 90547949.
A link to the audio replay will be available on our web site at www.bebe.com
following the conference call.
Forward-Looking Statements
Certain statements in this release are “forward-looking statements” made
pursuant to the safe-harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements reflect
the Company’s current expectations or beliefs concerning future events
and are subject to various risks and uncertainties that may cause actual
results to differ materially from those that we expected The statements
in this news release, other than the historical financial information,
contain forward-looking statements 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 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 or preferences in apparel,
loss of key personnel, difficulties in manufacturing, disruption of
supply, adverse economic conditions, and/or other factors that may be
described in the Company’s annual report on Form 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. We undertake no obligation to publicly update
or revise any forward-looking statement. Financial schedules are
attached to this release.
About bebe stores, Inc.:
bebe stores, inc. is a global specialty retailer, which designs,
develops and produces a distinctive line of contemporary women’s apparel
and accessories under the bebe, BEBE SPORT, bbsp and 2b bebe brand
names. bebe currently operates 228 stores, of which 178 are bebe stores,
including the on-line store bebe.com, and 50 are 2b bebe stores,
including the on-line store 2bstores.com. These stores are located in
the United States, U.S. Virgin Islands, Puerto Rico and Canada. bebe
also distributes and sells bebe branded product through its licensees in
approximately 26 countries.
bebe stores, inc.
SELECTED BALANCE SHEET DATA
(UNAUDITED)
(Dollars in thousands)
|
|
|
|
|
|
January 4, 2014
|
|
December 29, 2012
|
Assets
|
|
|
|
|
Cash and equivalents
|
|
$
|
130,862
|
|
$
|
92,653
|
Available for sale securities
|
|
21,977
|
|
64,086
|
Inventories, net
|
|
31,877
|
|
37,421
|
Total current assets
|
|
206,483
|
|
228,899
|
Available for sale securities
|
|
11,124
|
|
59,240
|
Property and equipment, net
|
|
99,593
|
|
112,595
|
Total assets
|
|
322,807
|
|
430,141
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
Total current liabilities
|
|
$
|
46,216
|
|
$
|
43,104
|
Total liabilities
|
|
78,465
|
|
82,915
|
Total shareholders’ equity
|
|
244,342
|
|
347,226
|
Total liabilities and shareholders’ equity
|
|
322,807
|
|
430,141
|
|
|
|
|
|
bebe stores, inc.
STATEMENTS OF OPERATIONS
(UNAUDITED)
(Amounts in thousands except per share data and store statistics)
|
|
|
|
For the Quarter Ended (number of weeks)
|
|
For the Year-to-Date Period Ended (number of weeks)
|
|
|
January 4, 2014 (13)
|
|
%
|
|
December 29, 2012 (13)
|
|
%
|
|
January 4, 2014 (26)
|
|
%
|
|
December 29, 2012 (26)
|
|
%
|
Net sales
|
|
$
|
129,974
|
|
|
100.0
|
%
|
|
$
|
135,535
|
|
|
100.0
|
%
|
|
$
|
244,101
|
|
|
100.0
|
%
|
|
$
|
252,626
|
|
|
100.0
|
%
|
Cost of sales, including production and occupancy
|
|
86,319
|
|
|
66.4
|
|
|
89,607
|
|
|
66.1
|
|
|
159,826
|
|
|
65.5
|
|
|
164,423
|
|
|
65.1
|
|
Gross margin
|
|
43,655
|
|
|
33.6
|
|
|
45,928
|
|
|
33.9
|
|
|
84,275
|
|
|
34.5
|
|
|
88,203
|
|
|
34.9
|
|
Selling, general and administrative expenses
|
|
49,265
|
|
|
37.9
|
|
|
53,393
|
|
|
39.4
|
|
|
99,341
|
|
|
40.7
|
|
|
99,588
|
|
|
39.4
|
|
Operating loss
|
|
(5,610
|
)
|
|
(4.3
|
)
|
|
(7,465
|
)
|
|
(5.5
|
)
|
|
(15,066
|
)
|
|
(6.2
|
)
|
|
(11,385
|
)
|
|
(4.5
|
)
|
Interest and other income, net
|
|
86
|
|
|
0.1
|
|
|
219
|
|
|
0.2
|
|
|
244
|
|
|
0.1
|
|
|
452
|
|
|
0.2
|
|
Loss before income taxes
|
|
(5,524
|
)
|
|
(4.2
|
)
|
|
(7,246
|
)
|
|
(5.3
|
)
|
|
(14,822
|
)
|
|
(6.1
|
)
|
|
(10,933
|
)
|
|
(4.3
|
)
|
Income tax benefit
|
|
(59
|
)
|
|
—
|
|
|
(2,427
|
)
|
|
(1.8
|
)
|
|
(203
|
)
|
|
(0.1
|
)
|
|
(3,533
|
)
|
|
(1.4
|
)
|
Net loss
|
|
$
|
(5,465
|
)
|
|
(4.2
|
)%
|
|
$
|
(4,819
|
)
|
|
(3.5
|
)%
|
|
$
|
(14,619
|
)
|
|
(6.0
|
)%
|
|
$
|
(7,400
|
)
|
|
(2.9
|
)%
|
Basic loss per share amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
|
|
$
|
(0.07
|
)
|
|
|
|
$
|
(0.06
|
)
|
|
|
|
$
|
(0.18
|
)
|
|
|
|
$
|
(0.09
|
)
|
|
|
Diluted loss per share amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
|
|
$
|
(0.07
|
)
|
|
|
|
$
|
(0.06
|
)
|
|
|
|
$
|
(0.18
|
)
|
|
|
|
$
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding
|
|
79,119
|
|
|
|
|
84,054
|
|
|
|
|
79,087
|
|
|
|
|
84,216
|
|
|
|
Diluted weighted average shares outstanding
|
|
79,119
|
|
|
|
|
84,054
|
|
|
|
|
79,087
|
|
|
|
|
84,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of stores open at beginning of period
|
|
235
|
|
|
|
|
250
|
|
|
|
|
242
|
|
|
|
|
252
|
|
|
|
Number of stores opened during period
|
|
—
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
6
|
|
|
|
Number of stores closed during period
|
|
3
|
|
|
|
|
1
|
|
|
|
|
11
|
|
|
|
|
8
|
|
|
|
Number of stores open at end of period
|
|
232
|
|
|
|
|
250
|
|
|
|
|
232
|
|
|
|
|
250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of stores expanded/relocated during period
|
|
—
|
|
|
|
|
1
|
|
|
|
|
—
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total square footage at end of period (000’s)
|
|
927
|
|
|
|
|
1,002
|
|
|
|
|
927
|
|
|
|
|
1,002
|
|
|
|
Copyright Business Wire 2014