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Guess earnings jump in the third quarter

By Prachi Singh

3 Dec 2020

Business

For the third quarter of fiscal 2020, Guess recorded GAAP net earnings of 26.4 million dollars, a 112.3 percent increase compared to 12.4 million dollars for the third quarter of fiscal 2020. GAAP diluted earnings per share increased 127.8 percent to 41 cents compared to 18 cents for the same prior-year quarter. Guess said in a statement that adjusted net earnings were 37.4 million dollars, a 150.7 percent increase compared to 14.9 million dollars, while adjusted diluted earnings per share increased 163.6 percent to 58 cents, compared to 22 cents for the same prior-year quarter. Total net revenue decreased 7.6 percent to 569.3 million dollars, while in constant currency, net revenue decreased by 10.1 percent.

Commenting on the results, Carlos Alberini, the company’s Chief Executive Officer, said: “We are very pleased with our third quarter performance, which significantly exceeded our expectations, in spite of the challenging circumstances we faced due to the pandemic. During the period, we have more than doubled our earnings per share versus last year, and significantly expanded our operating margin as our revenues decreased 7.6 percent.”

Third quarter highlights of Guess results

The company added that third quarter Americas retail revenues decreased 26.7 percent in U.S. dollars and 26.2 percent in constant currency and retail comp sales including e-commerce decreased 21 percent in U.S. dollars and 20 percent in constant currency. Americas wholesale revenues decreased 36.2 percent in U.S. dollars and 34.2 percent in constant currency.

Europe revenues increased 16 percent in U.S. dollars and 10.2 percent in constant currency, while retail comp sales including e-commerce decreased 9 percent in U.S. dollars and 13 percent in constant currency.

The company’s Asia revenues decreased 24.7 percent in U.S. dollars and 26.6 percent in constant currency with retail comp sales including e-commerce decreasing by 15 percent in U.S. dollars and 18 percent in constant currency. Licensing revenues for the quarter decreased 12.5 percent in U.S. dollars.

Review of nine months’ performance of Guess

For the nine months ended October 31, 2020, the company recorded GAAP net loss of 151.6 million dollars compared to GAAP net earnings of 16.4 million dollars, GAAP diluted loss per share was 2.35 dollars for the nine months compared to GAAP earnings per share of 22 cents during the same prior-year period. For the nine months period, the company recorded adjusted net loss of 82.2 million dollars, compared to adjusted net earnings of 22.7 million dollars for the nine months ended November 2, 2019, while adjusted diluted loss per share was 1.27 dollars compared to adjusted earnings per share of 31 cents during the same prior-year period.

Total net revenue for the period under review decreased 33.1 percent to 1.23 billion dollars, while in constant currency, net revenue decreased by 33.4 percent. The company further said, Americas retail revenues decreased 43.1 percent in U.S. dollars and 42.6 percent in constant currency, while Americas wholesale revenues decreased 43.2 percent in U.S. dollars and 40.8 percent in constant currency. Europe revenues decreased 23.4 percent in U.S. dollars and 24.9 percent in constant currency, Asia revenues decreased 39.2 percent in U.S. dollars and 38.8 percent in constant currency and licensing revenues decreased 25.3 percent in U.S. dollars.

Guess expects revenues in the fourth quarter of fiscal 2021 to be down in the low to mid-twenties, impacted by lower customer traffic in stores related to the pandemic and temporary government-mandated store closures, especially in Europe and Canada, as well as permanent store closures.

The company’s board of directors has approved a quarterly cash dividend of 0.1125 cents per share on the company’s common stock payable on January 4, 2021 to shareholders of record as of the close of business on December 16, 2020.

Picture:Facebook/Guess