bebe stores, inc. (NASDAQ:BEBE) today announced unaudited financial
results for the fiscal third quarter ended April 5, 2014.
For the third quarter of fiscal 2014:
Net sales were $93.5 million, a decrease of 17.2% from $112.9 million
for the third quarter a year ago. Comparable store sales for the quarter
ended April 5, 2014 decreased 5.7%. The sales decrease was due partially
to one fewer retail week in January in the current fiscal year coupled
with the closure of 19 unproductive stores since the prior year third
fiscal quarter. The Company’s sales results were also negatively
impacted by extreme weather throughout the fiscal third quarter this
year with up to 136 weather-related temporary store closures. In
addition, the Company believes that the timing of Easter in late April
had a greater than expected negative impact on sales in the quarter,
specifically in the outlet locations. Comparable store sales and traffic
in outlet stores were down in the mid-teens for the quarter.
Gross margin decreased to 27.1% compared to 29.7% in the third quarter
of fiscal 2013. The decrease in gross margin was primarily due to
deleveraging of sales. While we have experienced an increased level of
promotions in response to the challenging retail environment,
merchandising margin was 50 basis points higher than the third fiscal
quarter of the prior year.
SG&A expenses were $49.7 million, or 53.1% of net sales, compared to
$52.2 million, or 46.2% of net sales, for the same period in the prior
year. The SG&A expenses in the third quarter of fiscal 2014 reflect $2.9
million of store impairment charges. The SG&A expenses in the prior year
third quarter included $4.8 million costs related to hiring of a new
CEO, store impairment charges, rebranding agency costs, as well as other
transition related recruiting and severance costs.
Net loss for the third quarter of fiscal 2014 was $24.3 million, or
$0.31 per share, on 79.3 million shares outstanding compared to a net
loss of $49.3 million, or $0.62 per share, on 80.1 million shares
outstanding for the same period of the prior year. Note that the fiscal
2014 net loss reflects the continuing impact of maintaining a valuation
allowance against deferred tax assets, which was recorded in the third
quarter of the prior year in the amount of $31.4 million or $0.39 per
share. Our effective tax rate approximates 0% in the current fiscal
quarter.
During the quarter ended April 5, 2014, the Company closed six bebe
stores.
Steve Birkhold, Chief Executive Officer, commented, “As previously
disclosed in our preannouncement, our third quarter performance did not
meet our expectations largely due to winter storms and a challenging
overall retail environment. That said, we were highly encouraged with
the improved sales and margin performance in both our e-commerce and
catalog businesses. Overall, the favorable response to our spring
merchandise offering and marketing programs gives us confidence that we
are winning over and retaining our bebe girl. While we expect the
overall retail environment to remain challenging in the near term, we
believe that we are taking the right steps to position our company for
long term sustainable growth.”
For the year-to-date period ended April 5, 2014:
Net sales for the year-to-date period ended April 5, 2014 were $337.6
million, a decrease of 7.6% from $365.5 million for the year-to-date
period ended April 6, 2013. Comparable store sales for the year-to-date
period ended April 5, 2014 decreased 3.3%.
Net loss for the year-to-date period ended April 5, 2014 was $38.9
million compared to a net loss of $56.7 million in the prior year. Loss
per share for the year-to-date period ended April 5, 2014 was $0.49 per
share on 79.2 million shares outstanding, compared to a net loss of
$0.68 per share on 82.8 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, which
was recorded in the third quarter of fiscal 2013, and thus our effective
tax rate approximates 0%.
Balance sheet summary:
Cash and investments at April 5, 2014 were $139 million.
As of April 5, 2014, average finished goods inventory per square foot
decreased approximately 1.7% compared to the prior year.
Capital expenditures for the fiscal year-to-date period were $11.8
million.
Fourth quarter fiscal 2014 guidance:
For the fourth quarter of fiscal 2014, the Company expects comparable
store sales to be flat. Gross margin is expected to exhibit sequential
improvement. We expect net loss per share for the fourth quarter to be
in the mid-teens range prior to any non-recurring expenses. 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 fourth
quarter 2014 is anticipated to increase in the low to mid-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 open up one
bebe outlet store, and close one 2b bebe store, which will result in
approximately 8% decrease in the total store square footage from the end
of fiscal year 2013.
Webcast and Conference call information:
A live audio webcast of bebe stores, inc. third quarter fiscal 2014
earnings release call will be available May 8, 2014 at https://event.webcasts.com/starthere.jsp?ei=1033916.
The call begins 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 90548721.
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 226 stores, of which 176 are bebe stores,
including the on-line store bebe.com, and 50 are 2b and outlet 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)
|
|
|
|
|
|
|
|
April 5,
|
|
April 6,
|
|
|
2014
|
|
2013
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
|
$
|
115,940
|
|
$
|
81,839
|
Available for sale securities
|
|
|
11,504
|
|
|
41,084
|
Inventories, net
|
|
|
31,919
|
|
|
36,006
|
Total current assets
|
|
|
178,414
|
|
|
185,986
|
Available for sale securities
|
|
|
11,506
|
|
|
58,621
|
Property and equipment, net
|
|
|
96,146
|
|
|
112,112
|
Total assets
|
|
|
292,101
|
|
|
362,071
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
$
|
41,752
|
|
$
|
42,832
|
Total liabilities
|
|
|
72,773
|
|
|
81,211
|
Total shareholders' equity
|
|
|
219,328
|
|
|
280,860
|
Total liabilities and shareholders' equity
|
|
|
292,101
|
|
|
362,071
|
|
|
|
|
|
|
|
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
|
|
|
April 5,
|
|
|
|
|
April 6,
|
|
|
|
|
April 5,
|
|
|
|
|
April 6,
|
|
|
|
|
|
2014 (13)
|
|
%
|
|
|
2013 (14)
|
|
%
|
|
|
2014 (39)
|
|
%
|
|
|
2013 (40)
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
93,470
|
|
|
100.0
|
|
%
|
|
$
|
112,905
|
|
|
100.0
|
|
%
|
|
$
|
337,571
|
|
|
100.0
|
|
%
|
|
$
|
365,531
|
|
|
100.0
|
|
%
|
Cost of sales, including production and occupancy
|
|
|
68,178
|
|
|
72.9
|
|
|
|
|
79,327
|
|
|
70.3
|
|
|
|
|
228,004
|
|
|
67.5
|
|
|
|
|
243,750
|
|
|
66.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
25,292
|
|
|
27.1
|
|
|
|
|
33,578
|
|
|
29.7
|
|
|
|
|
109,567
|
|
|
32.5
|
|
|
|
|
121,781
|
|
|
33.3
|
|
|
Selling, general and administrative expenses
|
|
|
49,679
|
|
|
53.1
|
|
|
|
|
52,191
|
|
|
46.2
|
|
|
|
|
149,021
|
|
|
44.1
|
|
|
|
|
151,779
|
|
|
41.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
(24,387
|
)
|
|
(26.0
|
)
|
|
|
|
(18,613
|
)
|
|
(16.5
|
)
|
|
|
|
(39,454
|
)
|
|
(11.6
|
)
|
|
|
|
(29,998
|
)
|
|
(8.2
|
)
|
|
Interest and other income, net
|
|
|
19
|
|
|
-
|
|
|
|
|
251
|
|
|
0.2
|
|
|
|
|
263
|
|
|
0.1
|
|
|
|
|
703
|
|
|
0.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
(24,368
|
)
|
|
(26.0
|
)
|
|
|
|
(18,362
|
)
|
|
(16.3
|
)
|
|
|
|
(39,191
|
)
|
|
(11.5
|
)
|
|
|
|
(29,295
|
)
|
|
(8.0
|
)
|
|
Income tax (benefit)/provision
|
|
|
(92
|
)
|
|
(0.1
|
)
|
|
|
|
30,907
|
|
|
27.4
|
|
|
|
|
(295
|
)
|
|
(0.1
|
)
|
|
|
|
27,375
|
|
|
7.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(24,276
|
)
|
|
(25.9
|
)
|
%
|
|
$
|
(49,269
|
)
|
|
(43.7
|
)
|
%
|
|
$
|
(38,896
|
)
|
|
(11.4
|
)
|
%
|
|
$
|
(56,670
|
)
|
|
(15.5
|
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
|
|
$
|
(0.31
|
)
|
|
|
|
|
$
|
(0.62
|
)
|
|
|
|
|
$
|
(0.49
|
)
|
|
|
|
|
$
|
(0.68
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
|
|
$
|
(0.31
|
)
|
|
|
|
|
$
|
(0.62
|
)
|
|
|
|
|
$
|
(0.49
|
)
|
|
|
|
|
$
|
(0.68
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding
|
|
|
79,303
|
|
|
|
|
|
|
80,108
|
|
|
|
|
|
|
79,159
|
|
|
|
|
|
|
82,778
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
|
79,303
|
|
|
|
|
|
|
80,108
|
|
|
|
|
|
|
79,159
|
|
|
|
|
|
|
82,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of stores open at beginning of period
|
|
|
232
|
|
|
|
|
|
|
250
|
|
|
|
|
|
|
242
|
|
|
|
|
|
|
252
|
|
|
|
|
Number of stores opened during period
|
|
|
0
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
9
|
|
|
|
|
Number of stores closed during period
|
|
|
6
|
|
|
|
|
|
|
8
|
|
|
|
|
|
|
17
|
|
|
|
|
|
|
16
|
|
|
|
|
Number of stores open at end of period
|
|
|
226
|
|
|
|
|
|
|
245
|
|
|
|
|
|
|
226
|
|
|
|
|
|
|
245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of stores expanded/relocated during period
|
|
|
1
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total square footage at end of period (000's)
|
|
|
901
|
|
|
|
|
|
|
983
|
|
|
|
|
|
|
901
|
|
|
|
|
|
|
983
|
|
|
|
|
Copyright Business Wire 2014