Guess? (GES) Receives Tax Assessment of $12M from Italian Subsidiary; In-Line with Expectations
Get Alerts GES Hot Sheet
Price: $31.47 +0.87%
Revenue Growth %: +0.5%
Financial Fact:
Net earnings attributable to Guess?, Inc.: 6.57M
Today's EPS Names:
FSI, RELV, NEOM, More
Revenue Growth %: +0.5%
Financial Fact:
Net earnings attributable to Guess?, Inc.: 6.57M
Today's EPS Names:
FSI, RELV, NEOM, More
Join SI Premium – FREE
As previously disclosed, including in the Guess?, Inc. (NYSE: GES) Quarterly Report on Form 10-Q for the period ended July 28, 2012 (the “10-Q”), the Company has received tax audit reports from the Italian tax authority regarding its ongoing audit of one of the Company’s Italian subsidiaries for the 2008 and 2009 fiscal years. While the tax authority had not made a formal tax assessment at the time of the filing of the 10-Q, based on the audit reports, the Company believed it was likely to receive a formal tax assessment from the tax authority for these two periods for roughly $11 million. Subsequent to the filing of the 10-Q, the Company received a formal tax assessment that was largely consistent with the Company’s prior expectations, with a total tax assessment for the periods of approximately $12 million. Similar or even larger assessments for periods subsequent to fiscal 2009 or other claims or charges related to the matter continue to be possible.
The Company has been advised by its Italian counsel that tax audits like this one in Italy involving proposed income adjustments greater than €2 million are automatically referred for review by a public prosecutor who may seek to pursue charges or close the matter and that resulting criminal charges, if any, would be instituted against individuals rather than against the affected companies under Italian law. Consistent with this process, a review proceeding by a prosecutor in Italy has been initiated with respect to three current and former members of the Guess European management team and the Company’s former President (as the signing officer for certain Italian tax returns covering the relevant periods). As of October 23, 2012, the prosecutor has not made a final determination regarding this matter.
The Company continues to disagree with the positions that the Italian tax authority has indicated it may take and intends to vigorously contest this matter.
The Company has been advised by its Italian counsel that tax audits like this one in Italy involving proposed income adjustments greater than €2 million are automatically referred for review by a public prosecutor who may seek to pursue charges or close the matter and that resulting criminal charges, if any, would be instituted against individuals rather than against the affected companies under Italian law. Consistent with this process, a review proceeding by a prosecutor in Italy has been initiated with respect to three current and former members of the Guess European management team and the Company’s former President (as the signing officer for certain Italian tax returns covering the relevant periods). As of October 23, 2012, the prosecutor has not made a final determination regarding this matter.
The Company continues to disagree with the positions that the Italian tax authority has indicated it may take and intends to vigorously contest this matter.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Guess (GES) PT Raised to $32 at UBS
- Oxford Industries (OXM) Reports In-Line Q4 EPS, provides guidance
- Myomo (MYO) Appoints Heather Getz to its Board
Create E-mail Alert Related Categories
Corporate News, EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!