Guess unveils strategic plan to drive sales and profit growth
By Prachi Singh
3 Dec 2019
Guess, Inc. has announced a five-year plan containing long-term strategies and key initiatives to deliver global expansion, profit growth and value creation. As part of the fiscal 2025 strategic plan, the company’s priorities to drive revenue and operating profit growth over the next five years include brand relevancy, customer centricity, global footprint, product excellence and functional capabilities.
Commenting on the announcement, Carlos Alberini, Chief Executive Officer of Guess said in a statement: “I strongly believe that the Guess brand has tremendous potential to continue to expand globally and amplify its customer reach. We have built a plan based on our current regional trends with a clear path to double digit operating margin performance mainly anchored on operational efficiencies.”
Guess reveals strategic plans to drive growth
The plans to optimize brand architecture to be relevant with its three target consumer groups: heritage, millennials, and generation Z, while continuing to execute celebrity and influencer partnerships and collaborations as they are critical to engage more effectively with a younger and broader audience.
The company also intends to place the customers at the center of everything it does by implementing processes and platforms to provide the customers with a seamless omni-channel experience. Guess will continue to expand the reach of its brands by optimizing the productivity and profitability of current footprint and expanding the distribution channels. The company would also aim at driving material operational improvements in the next five years, primarily in the areas of logistics, sourcing, product development and production, inventory management, and overall infrastructure.
The company’s expectations for the fiscal year ending February 1, 2020 and goals for the fiscal year ending February 1, 2025 include sales increase between 2.7 percent and 3 percent for the full year, up low single digit CAGR between fiscal 2021 to 2025 and up approximately 250 million dollars in fiscal 2025 against fiscal 2020, operating profit to increase between 26 percent and 30 percent in fiscal 2020, up mid-teens CAGR between fiscal 2021 and 2025 and up approximately 150 million dollars in 2025 compared to 2020. Gross margin is expected to increase 160bp in 2020, up 80bp annual average between 2021 and 2025 and up 400bp in 2025, while operating margin is anticipated to increase between 100bp and 120bp in 2020, up 90bp annual average between 2021 and 2025 and up 450bp in 2025 against 2020. The company added that EPS is expected to increase between 34 percent and 39 percent to 1.31 to 1.36 dollars in 2020, up high-teens CAGR between 2021 and 2025 and to increase 2.3x to in the range of 3 dollars in 2025 against 1.31 to 1.36 dollars in 2020.