Wedbush Morgan California Dreamin 2008 Santa Monica, CA December 9, 2008
GUESS?, Inc. Carlos Alberini President & Chief Operating Officer 2
Safe Harbor Statement Except for historical information contained herein, certain matters discussed in this presentation and the related materials, including statements concerning the Company s future prospects and guidance for the fourth quarter and full year of fiscal 2009, are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 995. Forward-looking statements are only expectations, and involve known and unknown risks and uncertainties, which may cause actual results in future periods to differ materially from what is currently anticipated. Factors which may cause actual results in future periods to differ materially from current expectations include, among other things, domestic and international economic conditions, including economic and other events leading to a reduction in consumer confidence and discretionary consumer spending; our ability to, among other things, anticipate consumer preferences, effectively operate our various retail concepts, effectively manage inventories and successfully execute our strategies, including our supply chain and international growth strategies; and risks associated with changes in economic, political, social and other conditions affecting our foreign operations, including currency fluctuations. In addition to these factors, the economic and other factors identified in the Company s most recent annual report on Form 0-K and other filings with the Securities and Exchange Commission, including but not limited to the risk factors discussed therein, could cause actual results to differ materially from current expectations. 3
GUESS?... Strong Brand Recognition Diversified Business Model Solid Capital Structure Seasoned Management Team Effective Execution 4
Our Strategy Capitalize on Our Strong Brand Recognition Expand Our Global Retail Presence Expand E-Commerce Business Globally Continue to Develop New Markets in Europe Grow Our Asia Business 5
Brand Portfolio Young Women & Men 8 32 Women 25 36 Young Women & Men 6 25 Demographics Sexy, young, fashion-forward line Upscale, sophisticated line of contemporary fashion Affordable, young, trend-right line Brand Statement Apparel, Accessories & Footwear Apparel, Accessories & Footwear Apparel, Accessories & Footwear Lifestyle Assortment A & B Malls A Malls Secondary Retail & Key Outlet Malls Retail Strategy 6
North American Retail $960 FY08 Million* Total $4.6B As of //2008 US CAN Total FY09 Goals Retail Retail Factory 45 86 48 7 93 03 5 Factory Marciano 35 7 52 5 Accessories 23 6 29 5 Marciano Footwear -- 2 G by Guess 44 -- 44 0 Accessories Total 334 88 422 57 G by Guess Year End FY09 North American Stores = 423 E-Commerce *Latest Twelve Months 7 6
North American Stores Caesar s Forum Las Vegas, NV North County Escondido, CA Americana SOHO at Brand Glendale, New York, CA NY Americana at Brand Glendale, CA 8
International Retail Store Locations As of November, 2008 Licensees and Distributors Operate Most Stores Outside the U.S. and Canada Significant International Growth Plans Opened 85 New Stores in FY2008 85 New Stores in FY2009 Mexico 0 Guatemala 3 El Salvador Honduras Nicaragua Costa Rica Region Panama 2 Ecuador 2 Bahamas Aruba 2 Colombia 7 Venezuela 6 Trinidad & Tobago Brazil 3 Region 2 Finland Sweden 2 Norway Estonia 3 UK Latvia Ireland 9 Belgium Poland Ukraine Netherland Slovakia 4 Czech Rep. Switzerland 7 Hungary France 4 Croatia 2 Romania 20 3 Serbia 0 Monaco Greece Bulgaria Italy 4 Turkey Spain 78 6 8 Cyprus&Malta Armenia 6 Syria Morocco Egypt Azerbaijan S. Africa 28 Lebanon 5 Qatar Jordan Kuwait 7 Saudi Arabia 3 Region Bahrain 5 U.A.E. 3 Africa 0 28 Asia 45 257 Europe 32 222 Middle East 39 77 South America 20 30 Mexico 0 0 Caribbean Australia 5 26 Total 252 65 65 Stores in 70 Countries Including all Adults, Guess by Marciano, Kids, Outlet, Accessories and Footwear Stores Does not include International Concessions and ISS, stores in U.S. and Canada Russia 32 Region 3 India 22 Guam 3 Thailand 0 Vietnam Philippines 9* Concession Only 74 Stores @ China 24 Taiwan 4 Hong Kong 6 Malaysia 32 Singapor e 2/3/04 //08 S. Korea 4 Brunei 2 Indonesia 28 Australia 25 New Zealand 9
E-Commerce Growth Guess.com Marciano.com GbyGuess.com Seasoned Management Team System Upgrades Infrastructure Investments Window to the World of Guess Revenue Increased by 45% YTD FY09 Extension to Europe and Asia 0
Europe FY08 Total $4.6B $69 Million* Guess Jeans Handbags, Footwear & Others Guess by Marciano Growth Infrastructure - Team development - New headquarters - Systems integration - Showrooms in key fashion cities New Markets Development - Russia, Germany, UK, Northern Europe Retail Kids *Latest Twelve Months Retail Expansion - Owned stores - Licensed stores 6
Europe Retail La Spezia, Italy Viareggio, Italy Budapest, Hungary Budapest, Hungary Viareggio, Italy 2
Wholesale $29 FY08 Million* Total $4.6B South Korea - Stores/Concessions growth - 4 stores, 9 concession as of Q3 FY09 Asia North American Wholesale China - Opened flagship stores in Shanghai, Beijing, Hong Kong and Macau in FY08 - Franchisees in second tier cities - 30 stores, 33 concessions as of Q3 FY09 *Latest Twelve Months 3 6
Asia Stores Jakarta, Indonesia Shanghai, China Jakarta, Indonesia 4
Licensing $04 FY08 Million* Total $4.6B Handbags YTD Growth of 2% Growth In Key Product Categories Watches Shoes - Watches - Footwear - Handbags +34% YTD +20% YTD +5% YTD Eyewear - Eyewear - Jewelry +9% YTD +257% YTD Others *Latest Twelve Months 5
Managing in the Current Environment Opportunistic Real Estate Deals Make Prudent Capital Investments Keep Inventory Clean Reduce Cost Structure Protect Balance Sheet 6
GUESS?, Inc. Dennis Secor Sr. Vice President & Chief Financial Officer 7
Evolution of Our Business Model $637 Million FY08 Total $4.6B Europe 4% Licensing 6% Wholesale 20% $2.0 Billion* Europe 34% Licensing 5% Wholesale 4% Retail 70% Retail 47% *Latest Twelve Months 2003 2008 6 8
Diversified Business Model (Dollars in Millions) LTM Q3 FY09* Operating Revenue Earnings Operating Margin North American Retail $960.2 $29.8 3.5% % of Total 47% 3% Wholesale $29.3 $48.9 6.8% % of Total 4% % European Business $69.2 $57.5 22.8% % of Total 34% 37% Global Product Licensing $04. $90.4 86.8% % of Total 5% 2% Corporate Overhead ($70.) -3.4% Total Company $2,046.9 $356.5 7.4% *Latest Twelve Months 9
Financial Outlook (Dollars in Millions except EPS) LTM Q3 FY09* Product Sales $,942.8 Royalties 04. Net Revenue $2,046.9 % of Net Rev FY2009 Guidance $2.03 to $2.07 Billion Gross Profit 928.7 45.4% SG&A Expense 572.2 28.0% Operating Income 356.5 7.4% Net Income $220.8 0.8% Diluted EPS $2.35 *Latest Twelve Months 6.0% $2.27 to $2.32 Guidance Y/Y EPS Growth = 4% to 7% 20
Strong Cash Flow Generation (Dollars in Millions) 2002 2003 2004 2005 2006* FY2008 Net Income ($.3) $7.3 $29.6 $58.8 $3.2 $86.5 Depreciation & Amortization 38.0 34.9 35.4 34.6 39.6 50.6 Change in Working Capital/Other 0.7 24. 8.8 55.9 (29.) (6.6) Cash Provided from Operations 37.4 66.3 83.8 49.3 4.7 75.5 Capital Expenditures (29.4) (2.7) (34.8) (48.8) (52.3) (00.2) Free Cash Flow $8.0 $44.6 $49.0 $00.5 $89.4 $75.3 EBITDA $30.3 $55.6 $9.2 $ 36.4 $ 249.8 $ 357.9 *Recast year ended February 3, 2007 2
Strong Capital Structure (Dollars in Millions) /3/2007 //2008 Assets Cash, Restricted Cash & S/T Investments $9.9 $236.6 Receivables, Net 296.6 299.7 Inventories 223.0 253.0 Other Current Assets 46. 67.9 PPE, Net 220.0 243.7 Other Assets 44.6 45.9 Total Assets $,22.2 $,246.7 Liabilities & Equity Short Term Debt $43.3 $45.6 Other Current Liabilities 345. 305.4 Long Term Debt 8.2 4.5 Other Liabilities 08.6 6.4 Minority Interest 6.2 9.0 Equity 600.8 755.9 Total Liabilities & Equity $,22.2 $,246.7 Net Cash $30.5 $76.6 22
GUESS?... Strong Brand Recognition Diversified Business Model Solid Capital Structure Seasoned Management Team Effective Execution 23