Guess swings to loss on lagging Americas retail, wholesale revenues

By

Benjamin Fitzgerald

Published
May 25, 2023

Guess Inc. announced on Wednesday revenues for the first quarter decline 4% to $569.8 million, on the back of plunging U.S. retail and wholesale sales, partially offset by a surge in retail sales in Asia.

The Los Angeles-based brand said its Americas retail revenues decreased 14%, with retail comp sales, including e-commerce, decreasing 12%. The company's Americas wholesale revenues decreased 25%, while licensing revenues fell 10%.

By region, Europe revenues increased 2%, with retail comp sales, including e-commerce, increasing 10%, while Asia revenues surged 26%. Retail comp sales in the Asian market, including e-commerce, lifted 1%.

For the three months ending April 29, Guess ​swung to a net loss of $11.8 million, compared to net earnings of $8 million for the same prior-year quarter. ​Diluted net loss per share was $0.22 for the first quarter, compared to diluted net earnings per share $0.12 for the same prior-year quarter. 

​“We are pleased with our first quarter financial results which exceeded our expectations for revenues, operating margin and earnings per share," said Carlos Alberini, chief executive officer.

"Our international businesses were particularly strong during the quarter. This performance, coupled with strong cost controls and solid product margin performance, helped to more than offset softness in our Americas retail business as a result of slower customer traffic into our stores. I believe that our results this quarter highlight the power of our highly diversified business model and the strength of our brands and global distribution.”

Looking ahead, the fashion brand said it expects net revenues to grow between 2% and 4% for fiscal 2024, with diluted earnings per share to sit between $2.01 and $2.25 for the year.

“We are confident in our prospects and today are reaffirming our positive outlook for the year. For fiscal 2024, we continue to see topline growth in the low single digits, solid profit performance and strong cash flow generation," continued Alberini.

"We just completed a successful refinancing of our convertible bonds, gaining additional financial capacity and extending debt maturities by more than four years. We have a strong capital structure and remain committed to rewarding our shareholders with solid returns. Consistent with this commitment, we recently repurchased 2.2 million shares of our stock and our board just approved a 33% increase to our quarterly dividend, from $0.225 to $0.30 per share. We look forward to our future and are very confident in our teams to execute our plans effectively and capitalize on our opportunities for growth and value creation.”