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Guess posts strong rise in Q2 results

by Prachi Singh
29 Aug 2019

For its second quarter, Guess, Inc. recorded GAAP net earnings of 25.3 million dollars, a 0.8 percent decrease compared to 25.5 million dollars for the second quarter of fiscal 2019, while GAAP diluted earnings per share increased 12.9 percent to 35 cents compared to 31 cents for the prior-year quarter. The company recorded adjusted net earnings of 27.4 million dollars, a 6.9 percent decrease compared to 29.5 million dollars in the same quarter of 2019, while adjusted diluted earnings per share increased 5.6 percent to 38 cents compared to 36 cents for the prior-year quarter.

Commenting on the company’s performance, Carlos Alberini, the company’s Chief Executive Officer, said: “I am very pleased with our second quarter financial performance, which delivered strong operating profit growth. This performance exceeded our expectations and was driven by a solid top line increase, strong margin performance and effective expense management. Based on our second quarter performance, our strong inventory position and our expectations for the fall and Holiday seasons, we are raising our guidance for the full year.”

Review of Guess second quarter results Total net revenue for the second quarter increased 5.8 percent to 683.2 million dollars and in constant currency, net revenue increased by 8.8 percent. Americas retail revenues increased 0.9 percent in U.S. dollars and 1.2 percent in constant currency, while retail comp sales including e-commerce increased 2 percent in U.S. dollars and constant currency. Americas wholesale revenues increased 22.3 percent in U.S. dollars and 22.4 percent in constant currency.

Revenues in Europe increased 9.1 percent in U.S. dollars and 14.1 percent in constant currency, while retail comp sales including e-commerce decreased 3 percent in U.S. dollars and increased 1 percent in constant currency.

Asia revenues increased 0.6 percent in U.S. dollars and 5.2 percent in constant currency, while retail comp sales including e-commerce decreased 13 percent in U.S. dollars and 8 percent in constant currency. Licensing revenues decreased 5.9 percent in U.S. dollars and constant currency.

Highlights of Guess’s first half performance For the six months ended August 3, 2019, the company recorded GAAP net earnings of 3.9 million dollars, an 8.4 percent decrease from 4.3 million dollars for the six months ended August 4, 2018, while GAAP diluted earnings per share was flat at 5 cents. The company said, adjusted net earnings of 7.8 million dollars, decreased 32.9 percent compared to 11.6 million dollars for the six months ended August 4, 2018, while adjusted diluted earnings per share decreased 28.6 percent to 10 cents from 14 cents for the same prior-year period.

Total net revenue for the period increased 4.5 percent to 1.22 billion dollars, compared to 1.17 billion dollars in the same prior-year period and in constant currency, net revenue increased by 8.6 percent. Retail revenues in Americas increased 1.9 percent in U.S. dollars and 2.5 percent in constant currency, while retail comp sales including e-commerce increased 3 percent in U.S. dollars and constant currency. Americas wholesale revenues increased 17.6 percent in U.S. dollars and 18.7 percent in constant currency.

Revenues in Europe increased 6.4 percent in U.S. dollars and 13.3 percent in constant currency, while retail comp sales including e-commerce decreased 2 percent in U.S. dollars and increased 4 percent in constant currency.

Asia revenues increased 1 percent in U.S. dollars and 5.9 percent in constant currency and retail comp sales including e-commerce decreased 14 percent in U.S. dollars and 9 percent in constant currency. Licensing revenues decreased 5.4 percent in U.S. dollars and constant currency.

Guess raises full year revenue guidance For the full year, 2020 Guess anticipates revenues to rise in the range of 3 percent to 3.5 percent and 6 percent to 6.5 percent on a constant currency basis, GAAP EPS to range between 1.18 to 1.25 dollars and adjusted EPS to range between 1.28 dollars to 1.36 dollars

For its third quarter, Guess expects revenues to rise in the range of 2 percent to 3 percent or 4.5 percent to 5.5 percent in constant currency, GAAP EPS to range between 12 cents to 15 cents and adjusted EPS in the range of 15 to 18 cents.

The company’s board of directors has approved a quarterly cash dividend of 1125 cents per share, payable on September 27, 2019 to shareholders of record at the close of business on September 11, 2019.

photo: via Businesswire.com