Guess' numbers still down but with marked improvements

By

Obi Anyanwu

Published
Jun 3, 2015

Guess reported its first quarter results on Tuesday, revealing decreases in revenue in all business sectors. However, the licensing segment is showing encouraging results.

For the quarter, the company recorded net earnings of $3.3 million, compared to a net loss of $2.1 million for the first quarter of fiscal 2015. While total net revenue decreased 8.4% to $478.8 million, from $522.5 million in the prior-year quarter. In constant currency, total net revenue was roughly flat compared to the same prior-year period.

Paul Marciano, Chief Executive Officer, commented, "Overall first quarter results were better than our expectations, mainly driven by tight expense management. In North America, we saw improvements in the women's category, and Marciano delivered another quarter of good performance with comp sales up in the mid-single digits. Our e-commerce business continued to experience solid top-line growth of almost 14%. In Europe, our retail stores performed above expectations and delivered positive comps."

Guess' stores and e-commerce sites in North America generated revenue of $214.2 million in the first quarter of fiscal 2016, a 6.2% decrease from $228.3 million in the same period a year ago. Comparable store sales including the results of our e-commerce sites for the first quarter of fiscal 2016 decreased 5.9% in U.S. dollars and 3.8% in constant currency compared to the same period a year ago.

Net revenue from the company's Europe segment decreased 13.7% to $137.4 million in the first quarter of fiscal 2016, from $159.2 million in the prior-year period. In constant currency, net revenue increased 7.5%. Net revenue from the Asia segment decreased 8.7% to $64.0 million in the first quarter of fiscal 2016, from $70.1 million in the prior-year period. In constant currency, net revenue decreased 6.0%. Finally, net revenue from the company's North American wholesale segment decreased 5.2% to $37.3 million in the first quarter of fiscal 2016, from $39.3 million in the prior-year period. In constant currency, net revenue increased 1.4%.

However, for the licensing segment, net revenue increased 1.0% to $25.9 million in the first quarter of fiscal 2016, from $25.6 million in the prior-year period.

For the second quarter, Guess expects net revenue to decline between 3.5% and 1.5%.