Guess earnings miss expectations
Guess Inc. reported on Wednesday that fourth-quarter earnings missed Wall Street expectations, despite an overall revenue uptick of 5.7%.
The Los Angeles-based company said fourth quarter net earnings jumped to $23.2 million, or 28 cents per share, compared to net earnings of $1 million for the year-ago period. Adjusted earnings per share came in at 70 cents a share, but sat below analysts’ estimates of 75 cents. The shock news saw a 13.5 percent drop in its stock to $19.10 during after-hours trading on Wall Street.
For the quarter, net revenue increased 5.7 percent to $837.1 million, compared to $792.2 million in the prior-year quarter. Traders were calling for the business to report revenue of $831 million for the period, according to data compiled by Wall Street.
Again, the Americas retail revenues were down 0.7 percent, while comps were up 6 percent and Americas wholesale revenues jumped 19.2 percent during the quarter. Europe revenues increased 4.1 percent, while retail comps were flat. Asia was the strongest market, with revenues increasing 21.7 percent and retail comps up 13 percent during the quarter.
Likewise, for the fiscal year ending February 2, 2019, Guess saw net revenue increase 10.4 percent to $2.61 billion, compared to $2.36 billion in the prior year.
By region, retail revenues in the Americas fell 1 percent in U.S. dollars, while retail comp sales including e-commerce increased 4 percent. The Americas wholesale segment saw more success with revenues jumping 13.6 percent.
European revenues increased 14.4 percent. Retail comp sales including e-commerce increased 5 percent, while Asia revenues climbed the most jumping 25.7 percent. Retail comp sales in Asia were up 15 percent, said the group.
Net income for the year swung to $14.1 million, compared to a net loss of $7.9 million.
Guess recruited Carlos Alberini in January to be its new CEO, replacing Victor Herrero on Feb. 2. Alberini was formerly Guess’ president and chief operating officer between 2000 and 2010, but left to join Restoration Hardware as co-CEO until 2014. He later went on to be appointed chairman and CEO of Lucky Brand.
In a news statement, the newly appointed CEO said that he was "thrilled to be back at Guess", but noted that he still thought there was space for growth and change at the company.
“Looking forward, I plan to spend the next few weeks with our team developing our strategic vision and implementation plan. I intend to apply some key principles for shareholder value creation, including a disciplined approach to capital allocation and working capital management, careful product development and distribution, pursuing global initiatives to leverage and support our global business more effectively and, most importantly, placing the customer at the center of everything we do,” Alberini said.
For the fiscal year ending February 1, 2020, the company is expecting consolidated net revenue to increase between 4 and 5 percent and for the upcoming first quarter, an increase in sales between 2.5 and 3.5 percent.
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