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05/26/17 04:00:02 PM
MARKET MOVERS

Movers: Hormel Foods Corporation, Guess'', Inc.

Hormel Foods Corporation(HRL) : May 25--An oversupply of turkey in the marketplace continues to be a drag on Hormel Foods Corp.'s financial results, the company reported Thursday. The Austin-based company reported a weaker than expected second quarter, ending April 30, with a profit of $211 million. This marks a 2 percent drop over the same period in 2016. Earnings per share were also down a penny from a year ago to 39 cents. Jennie-O Turkey Store, the company's third-largest business unit, saw its operating profit plunge 29 percent in the second quarter as Hormel reacted to competition and pricing pressure. Its turkey volume was down 6 percent and its sales down 8 percent. "Despite ongoing challenges in the turkey industry, our balanced model allowed us to deliver earnings within two percent of last year's results," said Jim Snee, Hormel's president and chief executive, in a release. "Three segments delivered earnings growth, margin expansion, and adjusted volume and sales growth this quarter." Refrigerated foods, the company's largest unit accounting for nearly half of its sales, posted relatively flat operating profit. This segment includes products like Hormel bacon and Natural Choice deli meats, Grocery products, Hormel's second-largest unit with 20 percent of the overall business, was a bright spot this past quarter with an operating profit up 15 percent. Some of the company's newest and least conventional brands, like Justin's peanut butter and Wholly Guacamole, and its signature product, Spam, compose this segment. International sales were up 19 percent, leading to an operating profit increase of 38 percent compared to 2016, while its specialty foods segment saw an operating profit drop of 16 percent. The company maintained its 2017 full-year guidance range of $1.65 to $1.71 per share, but expects the challenging commodity environment to push it toward the lower end. "We expect the pressure on Jennie-O Turkey Store to continue for the remainder of the fiscal year given the oversupply in the turkey industry," Snee said in a release. "Even in this challenging commodity environment, our team is working hard to generate earnings growth by providing customers, consumers, and operators with on-trend, innovative value-added products." ___ (c)2017 the Star Tribune (Minneapolis) Visit the Star Tribune (Minneapolis) at www.startribune.com Distributed by Tribune Content Agency, LLC.



Guess', Inc.(GES) : May 24 -- Guess?, Inc. (NYSE: GES) today reported financial results for its first quarter ended April 29, 2017. Victor Herrero, Chief Executive Officer, commented, "We are pleased to report that our first quarter results finished above the high-end of our expectations for revenues, adjusted operating margin and earnings per share. We continued to see strong performance in our international businesses. In Europe and in Asia, our revenues were up 23% and 17% driven by new store openings and positive comp sales. We are also encouraged by the trends in adjusted operating margins for these two regions, as they expanded in the quarter relative to last year. In the Americas, as the performance of our business and the environment remain soft, we are more than ever focused on shrinking our footprint and profitability improvements." Mr. Herrero concluded, "In today's world, it is crucial to stay connected with our customers and their aspirations. The Guess Brand has always been associated with Sexy, and Sexy is being more broadly interpreted where anyone can be sexy. Authenticity is "in," and being real is more important than being perfect. The millennial and Gen Z consumer is seeking purpose-driven brands whose values align with their own. As always, we are adapting to this changing environment." This press release contains certain non-GAAP, or adjusted, financial measures. References to "adjusted" results exclude the impact of (i) asset impairment charges, (ii) restructuring charges, (iii) a restructuring related exit tax charge and (vi) the related tax effects of these adjustments, where applicable. A reconciliation of reported GAAP results to comparable non-GAAP results is provided in the accompanying tables and discussed under the heading "Presentation of Non-GAAP Information" below. First Quarter Fiscal 2018 Results For the first quarter of fiscal 2018, the Company recorded GAAP net loss of $21.3 million, a 15.4% improvement compared to $25.2 million for the first quarter of fiscal 2017. GAAP diluted loss per share improved 13.3% to $0.26 for the first quarter of fiscal 2018, compared to $0.30 for the prior-year quarter. For the first quarter of fiscal 2018, the Company recorded adjusted net loss of $19.4 million, a 0.5% deterioration from $19.3 million for the first quarter of fiscal 2017. Adjusted diluted loss per share deteriorated 4.3% to $0.24, from $0.23 for the prior-year quarter. The positive impact of currency on diluted loss per share in the first quarter of fiscal 2018 was approximately $0.03 per share. Net Revenue. Total net revenue for the first quarter of fiscal 2018 increased 2.2% to $458.6 million, compared to $448.8 million in the prior-year quarter. In constant currency, net revenue increased by 4.0%. * Americas Retail revenues decreased 14.9% in U.S. dollars and 14.7% in constant currency. Retail comp sales including e-commerce decreased 15% in U.S. dollars and constant currency. * Europe revenues increased 23.3% in U.S. dollars and 29.1% in constant currency. Retail comp sales including e-commerce increased 5% in U.S. dollars and 11% in constant currency. * Asia revenues increased 16.9% in U.S. dollars and 15.5% in constant currency. Retail comp sales including e-commerce increased 4% in U.S. dollars and 2% in constant currency. * Americas Wholesale revenues increased 5.7% in U.S. dollars and 7.7% in constant currency. * Licensing revenues decreased 9.3% in U.S. dollars and constant currency. Operating Loss. GAAP operating loss for the first quarter of fiscal 2018 improved 11.9% to $25.5 million (including a minimal currency translation impact), compared to $29.0 million in the prior-year quarter. GAAP operating margin in the first quarter improved 90 basis points to negative 5.6%, compared to negative 6.5% in the prior-year quarter, driven primarily by the anniversary of last year's restructuring charges, partially offset by higher asset impairment charges during the current-year period. The negative impact of currency on operating margin for the quarter was roughly 30 basis points. For the first quarter of fiscal 2018, adjusted operating loss was relatively flat at $22.8 million and adjusted operating margin was negative 5.0%, an improvement of 10 basis points compared to the same prior-year quarter. * Operating margin for the Company's Americas Retail segment decreased 920 basis points to negative 15.4% in the first quarter of fiscal 2018, from negative 6.2% in the prior-year quarter. Excluding the impact of the asset impairment charges, operating margin for the Company's Americas Retail segment decreased by 800 basis points compared to the same prior-year quarter. This decrease was driven primarily by the negative impact on the fixed cost structure resulting from negative comparable sales. * Operating margin for the Company's Europe segment increased 900 basis points to negative 1.9% in the first quarter of fiscal 2018, compared to negative 10.9% in the prior-year quarter. Excluding the impact of the asset impairment charges, operating margin for the Company's Europe segment improved by 890 basis points compared to the same prior-year quarter. This improvement was driven primarily by the favorable impact on the fixed cost structure resulting from overall leveraging of expenses and higher initial mark-ups. * Operating margin for the Company's Asia segment decreased 30 basis points to negative 1.3% in the first quarter of fiscal 2018, from negative 1.0% in the prior-year quarter. Excluding the impact of the asset impairment charges, operating margin for the Company's Asia segment improved by 60 basis points compared to the same prior-year quarter. The improvement in operating margin was driven primarily by overall leveraging of expenses. * Operating margin for the Company's Americas Wholesale segment increased 90 basis points to 18.5% in the first quarter of fiscal 2018, compared to 17.6% in the prior-year quarter, due to higher gross margins. The higher gross margins were driven primarily by higher initial mark-ups. * Operating margin for the Company's Licensing segment decreased 590 basis points to 85.5% in the first quarter of fiscal 2018, from 91.4% in the prior-year quarter. Other net income was $2.4 million for the first quarter of fiscal 2018, which primarily includes unrealized gains on non-operating assets, compared to other net expense of $1.1 million in the prior-year quarter. Dividends The Company's Board of Directors has approved a quarterly cash dividend of $0.225 per share on the Company's common stock. The dividend will be payable on June 23, 2017 to shareholders of record at the close of business on June 7, 2017. Outlook The Company's expectations for the second quarter of fiscal 2018 ending July 29, 2017 and its updated outlook for the fiscal year ending February 3, 2018 are as follows: Disclaimer: The table has been omitted (The document can be viewed at http://investors.guess.com/phoenix.zhtml?c=92506&p=irol-newsArticle&ID=2276399). Presentation of Non-GAAP Information The financial information presented in this release includes non-GAAP financial measures such as adjusted results, constant currency financial information and free cash flow measures. For the first quarter of fiscal 2018, the adjusted results exclude the impact of asset impairment charges and the related tax impact incurred during the first quarter of fiscal 2018. For the first quarter of fiscal 2017, the adjusted results exclude the impact of asset impairment charges, restructuring charges and a restructuring related exit tax charge and the tax effects of these adjustments. These non-GAAP measures are provided in addition to, and not as alternatives for, the Company's reported GAAP results. The Company has excluded these items from its adjusted financial measures primarily because it believes that the adjusted financial information provided is useful for investors to evaluate the comparability of the Company's operating results and its future outlook (when reviewed in conjunction with the Company's GAAP financial statements). A reconciliation of reported GAAP results to comparable non-GAAP results is provided in the accompanying tables. This release also includes certain constant currency financial information. Foreign currency exchange rate fluctuations affect the amount reported from translating the Company's foreign revenue, expenses and balance sheet amounts into U.S. dollars. These rate fluctuations can have a significant effect on reported operating results under GAAP. The Company provides constant currency information to enhance the visibility of underlying business trends, excluding the effects of changes in foreign currency translation rates. To calculate net revenue, comparable sales and earnings (loss) from operations on a constant currency basis, actual or forecasted results for the current-year period are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year. The constant currency calculations do not adjust for the impact of revaluing specific transactions denominated in a currency that is different to the functional currency of that entity when exchange rates fluctuate. However, in calculating the estimated impact of currency on our earnings per share for our actual and forecasted results, the Company estimates gross margin (including the impact of merchandise-related hedges) and expenses using the appropriate prior-year rates, translates the estimated foreign earnings at the comparable prior-year rates, and excludes the year-over-year earnings impact of gains or losses arising from balance sheet remeasurement and foreign currency contracts not designated as merchandise hedges. The constant currency information presented may not be comparable to similarly titled measures reported by other companies. The Company also includes information regarding its free cash flows in this release. The Company calculates free cash flows as cash flows from operating activities less purchases of property and equipment. Free cash flows is not intended to be an alternative to cash flows from operating activities as a measure of liquidity, but rather provides additional visibility to investors regarding how much cash is generated for discretionary and non-discretionary items after deducting purchases of property and equipment. Free cash flow information presented may not be comparable to similarly titled measures reported by other companies. A reconciliation of reported GAAP cash flows from operating activities to the comparable non-GAAP free cash flow measure is provided in the accompanying tables. Investor Conference Call The Company will hold a conference call at 4:45 pm (ET) on May 24, 2017 to discuss the news announced in this press release. A live webcast of the conference call will be accessible at www.guess.com via the "Investor Relations" link. The webcast will be archived on the website for 30 days. This document has footnotes and they may be found at: (http://investors.guess.com/phoenix.zhtml?c=92506&p=irol-newsArticle&ID=2276399). Source: GUESS Copyright 2014 Contify.com



 

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