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Guess Q3 earnings jump, declares dividend

By Prachi Singh

24 Nov 2021

Business

Image: Guess website

Guess, Inc. for the third quarter of fiscal 2022, recorded GAAP net earnings of 29.9 million dollars, a 140.5 percent increase from 12.4 million dollars for the third quarter of fiscal 2020. GAAP diluted EPS increased 150 percent to 45 cents compared to 18 cents for the third quarter of fiscal 2020.

The company’s adjusted net earnings were 41.6 million dollars, a 178.8 percent increase from 14.9 million dollars for the third quarter of fiscal 2020 and adjusted diluted EPS increased 181.8 percent to 62 cents.

Commenting on the company’s performance, Carlos Alberini, Guess chief executive officer, said: “We are very pleased with our performance this quarter, which exceeded our expectations for revenues and earnings. Our revenues for the quarter increased 13% versus last year and were up 4 percent compared to the third quarter of fiscal year 2020, pre-pandemic. The better performance than expected was driven by our European wholesale, Americas retail and licensing businesses, which posted strong top and bottom line results across the board.”

Guess Q3 revenues increase 4.4 percent

The company’s total net revenue increased 4.4 percent to 643.1 million dollars, while in constant currency, net revenue increased by 2.1 percent.

GAAP earnings from operations increased 190 percent to 65.7 million dollars, while GAAP operating margin increased 6.5 percent to 10.2 percent, from 3.7 percent in the third quarter of fiscal 2020. Adjusted earnings from operations increased 204.9 percent to 70.4 million dollars, from 23.1 million dollars in the third quarter of fiscal 2020 and adjusted operating margin increased 7.2 percent to 10.9 percent, from 3.7 percent in the third quarter of fiscal 2020.

Guess Q3 results compared to third quarter fiscal 2021

For the third quarter of fiscal 2022, the company recorded GAAP net earnings of 29.9 million dollars, a 13.3 percent increase from 26.4 million dollars for the third quarter of fiscal 2021. GAAP diluted EPS increased 9.8 percent to 45 cents for the third quarter of fiscal 2022, compared to 41 cents for the same prior-year quarter.

Adjusted net earnings for the quarter were 41.6 million dollars, an 11.2 percent increase from 37.4 million dollars for the third quarter of fiscal 2021, while adjusted diluted EPS increased 6.9 percent to 62 cents compared to 58 cents for the same prior-year quarter.

Total net revenue increased 13 percent to 643.1 million dollars and in constant currency, net revenue increased by 12.8 percent.

GAAP earnings from operations increased 47.7 percent to 65.7 million dollars, while GAAP operating margin increased 2.4 percent to 10.2 percent, from 7.8 percent in the same prior-year quarter. Adjusted earnings from operations increased 27.3 percent to 70.4 million dollars and adjusted operating margin increased 1.2 percent to 10.9 percent, from 9.7 percent in the same prior-year quarter.

Guess results for the nine-month period compared to nine-months of fiscal 2020

For the nine months ended October 30, 2021, the company recorded GAAP net earnings of 102.9 million dollars compared to 16.4 million dollars for the nine months ended November 2, 2019. GAAP diluted EPS was 1.55 dollars compared to 22 cents for the nine months ended November 2, 2019.

Adjusted net earnings were 119.5 million dollars compared to 22.7 million dollars for the nine months ended November 2, 2019 and adjusted diluted EPS was 1.79 dollars compared to 31 cents. Total net revenue for the period decreased 2.4 percent to 1.79 billion dollars from 1.84 billion dollars for the nine months ended November 2, 2019. In constant currency, net revenue decreased by 4.8 percent.

GAAP earnings from operations were 179.6 million dollars and GAAP operating margin for the period increased 7.6 percent to 10 percent, from 2.4 percent for the nine months ended November 2, 2019. Adjusted earnings from operations were 184.9 million dollars, compared to 48.6 million dollars for the nine months ended November 2, 2019, while adjusted operating margin improved 7.7 percent to 10.3 percent from 2.6 percent for the nine months ended November 2, 2019.

Guess nine-month period results compared to nine-months of fiscal 2021

For the nine months ended October 30, 2021, the Company recorded GAAP net earnings of 102.9 million dollars compared to a GAAP net loss of 151.6 million dollars for the nine months ended October 31, 2020. GAAP diluted EPS was 1.55 dollars compared to GAAP diluted loss per share of 2.35 dollars during the same prior-year period.

The company recorded adjusted net earnings of 119.5 million dollars compared to an adjusted net loss of 82.2 million dollars, while adjusted diluted EPS was 1.79 dollars compared to adjusted loss per share of 1.27 dollars during the same prior-year period. Total net revenue increased 45.9 percent to 1.79 billion dollars and in constant currency, net revenue increased by 41.7 percent.

GAAP earnings from operations were 179.6 million dollars compared to a GAAP loss from operations of 132.4 million dollars and GAAP operating margin increased 20.8 percent to 10 percent from negative 10.8 percent in the same prior-year period.

For the nine months ended October 30, 2021, adjusted earnings from operations were 184.9 million dollars compared to adjusted loss from operations of 54.2 million dollars for the nine months ended October 31, 2020. Adjusted operating margin improved 14.7 percent to 10.3 percent from negative 4.4 percent in the same prior-year period.

Guess reveals outlook for Q4 and full year

Guess expects revenues in the fourth quarter of fiscal 2022 to be down mid-single digits versus the fourth quarter of fiscal 2020 as the impact of permanent store closures and an unfavorable shift of European wholesale shipments from the fourth quarter into the first quarter of next year are partially offset by continued momentum in our global e-commerce business.

For the full fiscal year 2022, assuming no increased Covid-related shutdowns from current levels (approximately 1 percent of our directly operated stores), the company expects revenues to be down low-single digits versus fiscal 2020 and operating margin to reach approximately 11 percent.

“We are confident in our plans for the holiday business. Our inventory position is strong, and our customers are responding well to our assortments. Based on our progress, we now expect to deliver an operating margin of 11 percent in the current year, double that of fiscal 2020, pre-pandemic. We will continue to prioritize returning value to our shareholders and announced today that our board has approved to double our quarterly cash dividend from 1125 cents to 225 cents,” Alberini added.