Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Mahwah Bergen Retail Group, Inc. | a8-kcoverq4fy17.htm |
| EX-99.1 - EXHIBIT 99.1 - Mahwah Bergen Retail Group, Inc. | ex99-1q4fy17.htm |
Q4 FY17 Earnings Release
Supplemental Material
September 25, 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,” “guidance,” 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.
Q4 FY17 Q4 FY16 Q4 FY17 Q4 FY16
Comp Sales (4%) (5%)
Gross Margin 57.4% 57.5% 57.4% 57.4%
BD&O 19.3% 18.1% 19.3% 18.7%
SG&A 30.1% 29.8% 30.0% 30.1%
EPS ($0.08) $0.07 $0.05 $0.08
GAAP Non-GAAP (a)Q4 FY17
Earnings Highlights
3
(a) Non-GAAP figures are adjusted to exclude restructuring and acquisition and integration expenses, non-cash purchase accounting entries,
the impact of the 53rd week recorded in the fourth quarter of Fiscal 2016, and non-cash goodwill and intangible asset impairments
Q4 FY17
Sales Summary
4
Q4 FY17 Q4 FY16
Premium Fashion (3%) (6%)
Ann Taylor (2%) (12%)
LOFT (3%) (2%)
Value Fashion (6%) (8%)
maurices (8%) (9%)
dressbarn (4%) (7%)
Plus Fashion (4%) Flat
Lane Bryant (6%) 1%
Catherines 1% (5%)
Kids Fashion (4%) (4%)
Total Company (4%) (5%)
Comp Sales Performance
Premium
36%
Value
29%
Plus
22%
Kids
13%
Q4 FY17 Sales Mix
(a) Represents results of ANN INC. which was acquired in the first quarter of Fiscal 2016; for comparative purposes, Q4 FY16 comp sales
reflects internally generated ANN INC. data from the pre-acquisition period.
(a)
5,000,000
93,579,518
(13,880,511)
4.8%
(4.3%)
4.9%
(17.6%)
(1.5%)
Premium
Fashion
Value
Fashion
Plus
Fashion
Kids
Fashion
Total
Company
Q4 FY17
End-of-Period Segment Inventory
5
(a) Growth vs. LY at Premium fashion segment primarily caused by floorset timing and shift of seasonal LOFT clearance event into
August ($7M and $2M, respectively)
(b) Growth vs. LY at Plus fashion segment primarily caused by early receipts and major product launches ($9M and $3M, respectively)
(c) Decline vs. LY at Kids Fashion segment primarily driven by $9M reduction of liable Spring carryover goods and $4M in lower
average unit cost (increased penetration of lower cost Specialty product)
(a) (c) (b)
Q4 FY17
Capital Structure / Cash Flow
Capital expenditures: $59 million(a)
Ending cash and equivalents: $326 million(b)
Ending debt: $1,597 million(c)
Ending net debt to TTM EBITDA: ~2.4x(d)
TTM EBITDA cash interest coverage: ~6.1x(d,e)
Current liquidity: $826 million(f)
6
(a) Excludes change in period end accruals ($18.4 million as of Q3 FY17 and $26.6 million as of Q4 FY17)
(b) Of total $326 million, $224 million (~69%) held outside the U.S.
(c) Reflects remaining $1,597 million term loan balance; asset-based revolver undrawn at quarter end
(d) Ending debt net of cash and equivalents to TTM non-GAAP EBITDA of $529 million
(e) Based on TTM average Term Loan balance of $1,602 million and TTM average interest rate of 5.37%
(f) Ending cash and equivalents plus $500 million of availability under the asset based revolver
Real Estate Summary
7
Q4 FY16
Store
Locations
Store
Locations
Store
Locations
End of Q3 End of Q4 End of Q4
Premium Fashion 999 11 (10) 1,000 1,022
Ann Taylor 325 1 (4) 322 340
LOFT 674 10 (6) 678 682
Value Fashion 1,803 2 (21) 1,784 1,802
maurices 1,012 2 (9) 1,005 993
dressbarn 791 0 (12) 779 809
Plus Fashion 1,130 0 (7) 1,123 1,145
L ne Bryant 767 0 (3) 764 772
Catherines 363 0 (4) 359 373
Kids Fashion 918 0 (18) 900 937
Total Company 4,850 13 (56) 4,807 4,906
Q4 FY17
Store
Locations
Opened
Store
Locations
Closed
(a) Included ~$3M in deal cost amortization, consistent with guidance
Q4 Results vs. 6/8/17 Guidance
Non-GAAP Basis
8
Actual Guidance
Total Company Sales $1.659B $1.575 to $1.625B
Comparable Sales Down 4% Down ~8%
Gross Margin 57.4% 56.5% to 57.0%
Depreciation and amortization $90M ~$87M
Operating Income $44M $0 to $15M
Interest expense (a) $26M ~$25M
Effective tax rate 47% 45%
Diluted share count 196M 196M
EPS $0.05 ($0.06) to ($0.01)
(a) Inclusive of non-cash interest of approximately $3M and $12M (Q1 and full year, respectively) related to the amortization of the term loan
original issue discount and debt issuance costs
(b) Includes incremental $3M non-cash charge related to change in accounting treatment of stock-based compensation
(c) The Company is issuing selected full year guidance, due to limited visibility to macro trends impacting sales
Q1 and Full Year Fiscal 2018 Guidance -
Non-GAAP Basis
9
Q1 FY18 Full Year FY18(c)
Total Company Sales $1.58 to $1.62B
Comparable Sales Down 4% to Down 5%
Gross Margin 60.8% to 61.3% 58.1% to 58.6%
Depreciation and amortization ~$90M $358 to $363M
Operating Income $55 to $70M
Interest expense(a) ~$24M $100 to $105M
Effective tax rate(b) ~50%
Diluted share count 196M 197M
EPS $0.08 to $0.13
Capital Expenditures $190 to $220M
Ending Store Count 4,600 to 4,650
Anticipated Platform Savings
10
$235M
$300M(a)
(a) Represents top of the $250M - $300M range
$M FY15 FY16 FY17 FY18 FY19 FY20 Total
ANN Synergies
SG&A/COGS Non-merch procurement 9.4 24.0 15.3 2.0 50.7
Supply chain
BD&O Distribution / fulfillment 12.1 2.1 2.5 16.6
COGS Transportation / logistics 26.9 12.0 7.2 46.1
Organizational efficiency
SG&A Duplicative management teams 14.0 4.9 18.9
SG&A Employment benefit realignment 3.1 3.9 3.7 3.7 14.3
SG&A Public company costs / Other 2.1 1.1 3.3
ANN Cost Savings
SG&A SG&A optimization 7.4 27.6 35.0
COGS COGS initiative 24.5 20.5 5.0 50.0
Total ANN Savings 7.4 56.2 96.4 54.7 20.3 0.0 235.0
Change for Growth
Operating model
SG&A Front office efficiencies 29.0 31.0 60.0
SG&A Corporate efficiencies 6.9 15.0 18.1 40.0
SG&A Non-merch procurement 16.2 30.8 45.0 8.0 100.0
BD&O Real estate 10.6 15.0 15.0 9.4 50.0
SG&A IT efficiencies 5.0 35.0 10.0 50.0
Total Change For Growth 0.0 0.0 62.7 96.8 113.1 27.4 300.0
Total Platform Savings 7.4 56.2 159.0 151.6 133.4 27.4 535.0
Total Cumulative Achieved Savings 7.4 63.6 222.6 374.2 507.6 535.0 535.0