Guess earnings decline, adjusts outlook to reflect 'softer consumer environment'

For the second quarter, Guess recorded a GAAP net loss of 10.6 million dollars and GAAP diluted net loss per share of 28 cents, while adjusted net earnings were 23 million dollars, a 42 percent decrease from 39.7 million dollars and adjusted diluted EPS decreased 42 percent to 42 cents.

Total net revenue for the quarter increased 10 percent or 13 percent constant currency to 732.6 million dollars.

Commenting on the company’s financial performance, Carlos Alberini, Guess chief executive officer, said: “During the second quarter we delivered revenue growth of 10 percent, in line with our expectations. This performance was fueled by the Rag & Bone acquisition and strong wholesale performance in our Europe and Americas businesses.

Review of Guess second quarter results

The company’s Europe revenues increased 5 percent in US dollars and 8 percent in constant currency, while retail comparable sales including ecommerce increased 1 percent in US dollars and 4 percent in constant currency.

Americas retail revenues increased 8 percent in US dollars and 9 percent in constant currency with comparable sales decrease of 10 percent. Americas wholesale revenues increased 93 percent in US dollars and 94 percent in constant currency.

Asia revenues decreased 8 percent in US dollars and 4 percent in constant currency with comparable sales down 14 percent in US dollars and 10 percent in constant currency.

Licensing revenues increased 4 percent in both US dollars and constant currency.

Guess H1 earnings decrease by 75 percent

For the six month period, the company recorded GAAP net earnings of 2.4 million dollars, a 91 percent and 91 percent decrease in GAAP diluted EPS to 4 cents. Adjusted net earnings for the period of 9.1 million dollars, declined by 75 percent and adjusted diluted EPS decreased 75 percent to 16 cents.

Total net revenue for the first half increased 7 percent to 1.32 billion dollars and in constant currency, net revenue increased by 10 percent. Guess revenues in Europe increased 3 percent in US dollars and 8 percent in constant currency with retail comparable sales including e-commerce up 2 percent in US dollars and 6 percent in constant currency.

Americas retail revenues increased 5 percent in both US dollars and constant currency with comparable sales decreasing by 9 percent in both US dollars and constant currency. Americas wholesale revenues increased 54 percent in US dollars and 53 percent in constant currency.

Asia revenues decreased 2 percent in US dollars and increased 2 percent in constant currency with comparable sales down 12 percent in US dollars and 8 percent in constant currency.

Licensing revenues increased 12 percent in both US dollars and constant currency.

Guess adjusts outlook to reflect difficult consumer environment

For the year ahead, Guess projects consolidated net revenue in US dollars to increase between 9.5 to 11 percent, GAAP operating margin to be in the range of 7.2 to 7.7 percent, adjusted operating margin to be between 7.3 and 7.8 percent, GAAP diluted EPS in the range of 1.92 dollars to 2.14 dollars and adjusted diluted EPS between 2.42 dollars to 2.70 dollars.

For the third quarter, the company anticipates consolidated net revenue in US dollars to increase between 14.5 and 16.5 percent, GAAP and adjusted operating margin to be in the range of 4.7 to 5.8 percent, GAAP diluted EPS in the range of 28 cents to 38 cents and adjusted diluted EPS between 33 cents to 45 cents.

“As we look into the second half of the year, we are adjusting our outlook for revenues and earnings to reflect the softer consumer environment. As always, we will manage our costs and inventories carefully, while we continue to support the growth of our business, including investments in marketing, new stores and infrastructure,” added Alberini.

The company’s board of directors has approved a quarterly cash dividend of 30 cents per share on the company’s common stock payable on September 27, 2024 to shareholders of record as of the close of business on September 11, 2024.