Guess reports sharp drop in Q3 earnings

Guess reports sharp drop in Q3 earnings

Guess, Inc.’s third-quarter net income of $21.8 million fell 26.9 percent and GAAP diluted net earnings per share fell 24.4 percent to 34 cents.

The company’s adjusted net income was $24.7 million, down 40.4 percent, and adjusted diluted EPS fell 29 percent to 44 cents, compared to the same quarter last year.

Total net income for the third quarter fell 2 percent to $633.4 million, while net income in constant currency increased 10 percent.

For the fourth quarter of fiscal year 2023, Guess expects revenue to be down around 3.5 percent in US dollars and up 3.5 percent in constant currency, while revenue for the full year is expected to be up around 2 percent in US dollars and 10.5 percent in constant currency compared to financial year 2022.

Commenting on the results, Carlos Alberini, the company’s chief executive, said: “Our revenues fell by almost 2 per cent in US dollars, but grew 10 per cent in constant currency, mainly driven by the strength of our business in Europe. For the period, we managed the business well and delivered an operating margin of 8.6 per cent and 55 million dollars in operating profit.”

Alberini added, saying: “We are well positioned for our holiday period. Our updated outlook for the financial year reflects these trends and the impact of additional currency headwinds.”

Highlights of Guess’ performance across markets

The company said U.S. retail revenue fell 2 percent in U.S. dollars and 1 percent in constant currency, while retail sales, including e-commerce, fell 1 percent in U.S. dollars and were relatively flat in constant currency. Americas wholesale revenue fell 10 percent in US dollars and 9 percent in constant currency.

Revenue in Europe fell 2 percent in US dollars and increased 17 percent in constant currency, while retail sales, including e-commerce, decreased 8 percent in US dollars and increased 9 percent in constant currency.

Asia revenue increased 10 percent in US dollars and 28 percent in constant currency, while retail sales, including e-commerce, decreased 2 percent in US dollars and increased 13 percent in constant currency.

License income increased by 4 percent in US dollars and constant currency.

Guess posts fall in nine months of earnings

For the nine months ended Oct. 29, 2022, the company posted GAAP net income of $53.8 million, down 47.8 percent, while GAAP diluted EPS fell 48.4 percent to 80 cents for the period.

The company recorded adjusted net earnings of $62.9 million for the period, a decrease of 47.4 percent, and adjusted diluted EPS decreased by 40.8 percent to $1.06.

Total net income for the nine months increased 4 percent to $1.87 billion, while net sales in constant currency increased 14 percent.

U.S. retail revenue remained consistent in U.S. dollars and increased 1 percent in constant currency, while retail sales, including e-commerce, decreased 2 percent in U.S. dollars and 1 percent in constant currency. Americas Wholesale revenue increased 11 percent in US dollars and 12 percent in constant currency.

Revenue in Europe increased 5 percent in US dollars and 21 percent in constant currency, while retail sales, including e-commerce, decreased 6 percent in US dollars and increased 8 percent in constant currency.

Asia revenue increased 5 percent in US dollars and 17 percent in constant currency, while retail sales, including e-commerce, decreased 5 percent in US dollars and increased 5 percent in constant currency.

License income increased by 13 percent in US dollars and constant currency.

The Company’s Board of Directors approved a quarterly cash dividend of 0.225 cents per share on the Company’s common stock payable on December 23, 2022 to shareholders of record at the close of business on December 7, 2022.

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