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Management

Guess Q4 earnings fall, revenues drop 23 percent

By Prachi Singh

Apr 1, 2021

For the fourth quarter of fiscal 2021, Guess recorded GAAP net earnings of 70.4 million dollars, an 11.5 percent decrease from the fourth quarter of fiscal 2020. The company said, GAAP diluted earnings per share decreased 9.3 percent to 1.07 dollars for the quarter compared to 1.18 dollars for the same prior-year quarter, while adjusted net earnings were 77.7 million dollars, a 5.7 percent decrease from 82.3 million dollars and adjusted diluted earnings per share decreased 3.3 percent to 1.18 dollars compared to 1.22 dollars for the same prior-year quarter.

Commenting on the financial performance, Carlos Alberini, Guess Chief Executive Officer, said in a release: “During the period, we expanded gross margin and managed expenses tightly, which helped us to mitigate the anticipated revenue decrease. We are committed to delivering net revenues of 2.9 billion dollars by fiscal year 2025 and an operating margin of 10 percent by that year. I am confident that we have an opportunity to more than double our earnings per share by fiscal year 2025 to 3 dollars from 1.33 dollars in fiscal 2020 and improve our return on invested capital to 26 percent in fiscal 2025 from 12 percent in fiscal 2020.”

Guess reports 23 percent drop in Q4 sales

Total net revenue for the fourth quarter decreased 23 percent to 648.5 million dollars, while in constant currency, net revenue decreased by 25.9 percent. The company added that Americas retail revenues decreased 24.2 percent in U.S. dollars and 24 percent in constant currency. Retail comp sales including e-commerce decreased 15 percent in U.S. dollars and constant currency. Americas wholesale revenues decreased 15.3 percent in U.S. dollars and 14.1 percent in constant currency.

Europe revenues decreased 26.8 percent in U.S. dollars and 31.8 percent in constant currency and retail comp sales including e-commerce increased 2 percent in U.S. dollars and decreased 5 percent in constant currency.

Asia revenues decreased 16.2 percent in U.S. dollars and 20.7 percent in constant currency. Retail comp sales including e-commerce decreased 18 percent in U.S. dollars and 22 percent in constant currency. The company’s licensing revenues increased 12.2 percent in U.S. dollars.

Review of full year results at Guess

For the fiscal year ended January 30, 2021, the company recorded GAAP net loss of 81.2 million dollars compared to GAAP net earnings of 96 million dollars for the fiscal year ended February 1, 2020. GAAP diluted loss per share was 1.27 dollars compared to GAAP earnings per share of 1.33 dollars during the prior year.

For the year, the company recorded adjusted net loss of 4.5 million dollars compared to adjusted net earnings of 105 million dollars for the previous fiscal year and adjusted diluted loss per share was 7 cents, compared to adjusted earnings per share of 1.45 dollars during the prior year.

Total net revenue for fiscal 2021 decreased 29.9 percent to 1.88 billion dollars from 2.68 billion dollars in the prior year. In constant currency, net revenue decreased by 31 percent.

The company said, Americas retail revenues decreased 37.1 percent in U.S. dollars and 36.7 percent in constant currency, Americas wholesale revenues decreased 36.9 percent in U.S. dollars and 34.8 percent in constant currency.

Europe revenues decreased 24.6 percent in U.S. dollars and 27.2 percent in constant currency. Asia revenues decreased 32.8 percent in U.S. dollars and 33.8 percent in constant currency. Licensing revenues decreased 13.8 percent in U.S. dollars.

Guess expects Q1 revenues to be down high-single digits

Guess said that the company expects revenues in the first quarter of fiscal 2022 to be down in the high-single digits versus the first quarter of fiscal 2020 as pandemic-related shutdowns and traffic declines are partially offset by continued momentum in global e-commerce business and the favourable timing shift of European wholesale shipments from the fourth quarter of fiscal 2021 into the first quarter of fiscal 2022.

For the full fiscal year 2022, assuming no COVID-related shutdowns past the first quarter, the company expects revenues to be down in the high single digits versus fiscal 2020. The expectation for the full year also assumes a return to a normal cadence of product development and shipments for the European wholesale business.

The company’s board of directors has approved a quarterly cash dividend of 1125 cents per share on the company’s common stock payable on April 30, 2021 to shareholders of record as of the close of business on April 14, 2021.

Image: Guess, Facebook