Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - Mahwah Bergen Retail Group, Inc. | ex99-1q2fy17.htm |
| 8-K - 8-K - Mahwah Bergen Retail Group, Inc. | a8-kcoverq2fy17.htm |
Q2 FY17 Earnings Release
Supplemental Material
March 6, 2017
Safe Harbor Statement
2
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements are based on current expectations and are indicated by words or phrases
such as “anticipate, “estimate,” “expect,” “project,” “plan,” “we believe,” “will,” “would” and similar words or
phrases, and involve known and unknown risks, uncertainties and other factors which may cause actual results,
performance or achievements to be materially different from the future results, performance or achievements
expressed in or implied by such forward-looking statements.
Detailed information concerning those risks and uncertainties are readily available in the Company’s filings with the
U.S. Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-
looking statements, whether as a result of new information, future events or otherwise.
Where indicated, certain financial information herein has been presented on a non-GAAP basis. This basis adjusts for
non-recurring items that management believes are not indicative of the Company’s underlying operating
performance. These measures may not be directly comparable to similar measures used by other companies and
should not be considered a substitute for performance measures in accordance with GAAP such as operating income
and net income. Additionally, a reconciliation of the projected non-GAAP EPS, which are forward-looking non-GAAP
financial measures, to the most directly comparable GAAP financial measures, is not provided because the Company
is unable to provide such reconciliation without unreasonable effort. The inability to provide a reconciliation is due to
the uncertainty and inherent difficulty predicting the occurrence, the financial impact and the periods in which the
non-GAAP adjustments may be recognized. These GAAP measures may include the impact of such items as
restructuring charges, acquisition and integration related expenses, asset impairments and the tax effect of all such
items. As previously stated, the Company has historically excluded these items from non-GAAP financial measures.
The Company currently expects to continue to exclude these items in future disclosures of non-GAAP financial
measures and may also exclude other items that may arise (collectively, “non-GAAP adjustments”). The decisions and
events that typically lead to the recognition of non-GAAP adjustments, such as actions under the Company's Change
for Growth program, or acquisition and integration expenses, are inherently unpredictable as to if or when they may
occur. For the same reasons, the Company is unable to address the probable significance of the unavailable
information, which could be material to future results. Reference should be made to today’s earnings release for the
nature of such adjustments and for a reconciliation of such non-GAAP measures to the Company’s financial results
prepared in accordance with GAAP.
Q2 FY17
Earnings Highlights
3
(a) Non-GAAP figures are adjusted to exclude restructuring and acquisition and
integration expenses, along with the impact of non-cash purchase accounting entries
related to write up of ANN’s assets and liabilities to fair market value
Q2 FY17 Q2 FY16 Q2 FY17 Q2 FY16
Comp Sales (4%) (5%)
Gross Margin 54.1% 52.6% 54.1% 53.8%
BD&O 18.3% 17.9% 18.3% 18.0%
SG&A 30.8% 29.8% 30.7% 29.7%
EPS ($0.18) ($0.12) ($0.07) $0.01
GAAP Non-GAAP (a)
Q2 FY17
Sales Summary
4
Q2 FY17 Q2 FY16
Premium Fashion (5%) (2%)
Ann Taylor (9%) (7%)
LOFT (2%) 1%
Value Fashion (6%) (2%)
maurices (8%) Flat
dressbarn (3%) (4%)
Plus Fashion (4%) 1%
Lane Bryant (5%) 2%
Catherines Flat (3%)
Kids Fashion (1%) (17%)
Total Company (4%) (5%)
Comp Sales Performance
Premium
35%
Value
27%
Plus
20%
Kids
18%
Q2 FY17 Sales Mix
Q2 FY17
End-of-Period Segment Inventory
5
(a) Inventory figures for the Value, Plus, and Kids Fashion segments reflect differences of intercompany in-transit allocation from the Kids Fashion segment
(importer of record) to the Value and Plus Fashion segments (~$11M and ~$15M, respectively) in the prior year
(b) Adjusted inventory at Value and Plus Fashion segments reflects the impact of earlier shipments out of Asia due to the timing of the Chinese New Year;
excluding receipt timing, adjusted inventory was up 4.4% and 2.1% at the Value and Plus Fashion segments, respectively, and down 0.6% for total company
(8.3%)
17.6%
16.1%
(24.5%)
2.5%
Premium
Fashion
Value
Fashion
Plus
Fashion
Kids
Fashion
Total
Company
Reported
(8.3%)
11.1%
6.1%
1.5%
2.5%
Premium
Fashion
Value
Fashion (b)
Plus
Fashion (b)
Kids
Fashion
Total
Company
Adjusted (a)
Q2 FY17
Balance Sheet and Cash Flow Highlights
Capital expenditures of $34 million(a)
Ending balance of $300 million in cash and cash
equivalents; $228 million outside the U.S.
Ending debt of $1,597 million, reflecting remaining
term loan balance; $600 million asset-based
revolver undrawn at quarter-end
6
(a) Excludes change in period end accruals ($32M as of Q1 FY17 and $18M as of Q2 FY17)
Real Estate Summary
7
Quarter Ended January 23, 2016
Store
Locations
Store
Locations
Store
Locations
End of Q1 End of Q2 End of Q2
Premium Fashion 1,023 1 (18) 1,006 1,027
Ann Taylor 340 0 (12) 328 346
LOFT 683 1 (6) 678 681
Value Fashion 1,815 9 (17) 1,807 1,797
maurices 1,006 7 (1) 1,012 976
dressbarn 809 2 (16) 795 821
Plus Fashion 1,146 3 (10) 1,139 1,139
L ne Bryant 776 3 (9) 770 763
Catherines 370 0 (1) 369 376
Kids Fashion 936 0 (10) 926 955
Total Company 4,920 13 (55) 4,878 4,918
Quarter Ended January 28, 2017
Store
Locations
Opened
Store
Locations
Closed
(a) Included ~$3M in deal cost amortization, consistent with guidance
Q2 Results vs. 1/10/17 Guide -
Non-GAAP Basis
8
Actual Guidance
Total Company Sales $1.749B ~$1.75B
Gross Margin 54.1% 54.1 – 54.3%
Operating Income $3M ($14) to ($4)M
Interest expense (a) $25M ~$25M
Effective tax rate 37% 40%
Diluted share count 195M 196M
EPS ($0.07) ($0.11) to ($0.08)
(a) Inclusive of non-cash interest of approximately $3M and $12M (Q3 and full year, respectively) related to the amortization of the term loan
original issue discount and debt issuance costs
Q3 and Full Year Fiscal 2017 Guide -
Non-GAAP Basis
9
Q3 FY17 Full Year FY17
Total Company Sales $1.600 to $1.650B $6.775 to $6.825B
Comparable Sales Down 5% to Down 4% Down 4% to Down 3%
Gross Margin 60.5% to 61.0% 58.5 - 58.7%
Depreciation and amortization ~$88M ~$350M
Operating Income $45 to $60M $215 to $230M
Interest expense (a) ~$24M $95 to $100M
Effective tax rate 41% 41%
Diluted share count 196M 196M
EPS $0.07 to $0.12 $0.37 to $0.42
Full Year FY17 Guide -
Quarterly Comp Sales Progression
(5.0%)
(4.2%) (4%) - (5%)
(0.5%) - (1.5%)
(3%) -(4%)
(5.1%)
(5.3%)
~(6.5%)
~(6%)
Q1 (A) Q2 (A) Q3 (E) Q4 (E) Full Year (E)
FY17 Actual / Guide Two-year Comp Stack
~(6%)
(a) Q4 comp acceleration supported by omni-channel platform rollout, segment initiatives, and easier prior year compares
(b) Two-year comp stack excludes Justice FY16 comp progression, due to selling strategy reset implemented in July 2015 10
(a)
(b)
Q3 / Q4 detail –
y-o-y earnings bridge
Y-O-Y Assumptions
Comp: (5%) – (4%)
Gross margin rate: flat
Y-O-Y Assumptions
Comp: (1.5%) – (0.5%)
Gross margin rate: +60bp
11
Note: ‘Platform savings’ includes ANN synergies / cost savings and Change for Growth transformation savings; guide includes ~$45 million and
~$35 for ANN synergies and Change for Growth transformation savings, respectively, split roughly evenly between Q3 and Q4