Published
Mar 18, 2016
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Guess reaches guidance target, still far from company turnaround

Published
Mar 18, 2016

Guess, Inc. reported on Thursday its unaudited financial results for its fourth quarter and fiscal year ended January 30, 2016.



 
The company recorded company wide decreases wide for the fourth quarter. Net earnings decreased 11.4% to $47.8 million from $53.9 million in the previous fourth quarter. Total net revenue decreased 5.5% to $658.3 million from $696.7 million in the prior year with Americas Retail revenue decreasing 3%, retail comp sales including e-commerce decreasing 1%, Europe revenues decreasing 5%, Asia revenues decreasing 18% and Americas Wholesale decreasing 9% all in US dollars.
 
The results varied in constant currency with Americas Retail increasing 1%, retail comp sales including e-commerce increasing 2%, Europe revenues increasing 6%, Asia revenues decreasing 14% and Americas Wholesale decreasing 1%.

Though behind from last year, the company is pleased with its current position in turning around the company. Victor Herrero, Chief Executive Officer, commented, "I am pleased to report that fourth quarter earnings per share were within the range of our guidance. In Europe, our retail business performed extremely well and delivered positive comp store sales in the high-single digits. In the Americas, our retail business in the U.S. and Canada also achieved positive comps in constant currency. There is still more work to be done, but I am convinced that the initiatives we have started to implement in the last few months have contributed to these encouraging results."
 
For the full year, net earnings decreased 13.4% to $81.9 million from $94.6 million and total net revenue decreased 8.8% to $2.20 billion from $2.42 billion. Operating margin varied according to the region—Americas Retail increased 300 basis points and the Asia segment increased 140 basis points, while the Europe segment decreased 40 points, Americas Wholesale decreased 200 basis points and the Licensing segment decreased 240 basis points.
 
Mr. Herrero added, "Turning to the outlook for the next three years, based on the Strategic Initiatives that I have mentioned in the last two earnings calls, we are planning for our annual revenues to reach $3.0 billion in three years at prevailing currency rates. This $800 million increase is expected to be driven by growth in E-commerce, retail expansion and positive comp store sales. In terms of regional growth, we expect $300 million of this increase to be driven by the Americas, $300 million by Europe and $200 million by Asia.”
 
Guess expects its first quarter 2017 net revenues to decline between 1.5% and 0.5% in constant currency and for its fiscal year net revenues to increase between 7.0% and 9.0% in constant currency.

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