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Guess Q1 earnings drop, revenues increase by 14 percent

By Prachi Singh

May 26, 2022

Management

Image: Guess

Guess?, Inc., for its first quarter ended April 30, 2022 reported GAAP net earnings of 8 million dollars, a 33.6 percent decrease from 12 million dollars for the first quarter of fiscal 2022. GAAP diluted EPS decreased 33.3 percent to 12 cents compared to 18 cents for the same prior-year quarter.

The company’s adjusted net earnings for the quarter were 15.2 million dollars, a 9.8 percent increase from 13.9 million dollars for the first quarter of fiscal 2022. Adjusted diluted EPS increased 14.3 percent to 24 cents compared to 21 cents for the same prior-year quarter.

Total net revenue increased 14 percent to 593.5 million dollars, while in constant currency, net revenue increased by 21 percent.

Commenting on the first quarter performance, Carlos Alberini, the company’s chief executive officer, said: “We are very pleased with our first quarter results which exceeded our expectations for top line and operating performance. During the quarter, we continued to prioritise returning value to our shareholders and purchased over 500,000 shares of our stock in open market transactions and entered into a 175 million dollars accelerated share repurchase program which is presently being executed.”

Highlights of Guess results in the first quarter

The company’s retail revenues in the Americas increased 7 percent in U.S. dollars and constant currency. Retail comp sales, including e-commerce, increased 3 percent both in U.S. dollars and constant currency. Americas wholesale revenues increased 50 percent in U.S. dollars and constant currency.

Europe revenues increased 14 percent in U.S. dollars and 26 percent in constant currency. Retail comp sales, including e-commerce, decreased 6 percent in U.S. dollars and increased 3 percent in constant currency.

Asia revenues increased 1 percent in U.S. dollars and 8 percent in constant currency. Retail comp sales, including e-commerce, decreased 11 percent in U.S. dollars and 5 percent in constant currency.

Licensing revenues increased 23 percent in U.S. dollars and constant currency.

Guess expects FY23 revenues to increase by 4 percent

For the second quarter of fiscal 2023, assuming no meaningful Covid-related shutdowns, Guess expects revenues to be up around 1 percent in U.S. dollars and up 8 percent in constant currency and operating margin to reach approximately 7.5 percent.

For the full fiscal year 2023, the company expects revenues to be up around 4 percent in U.S. dollars and 10 percent in constant currency versus fiscal 2022 and GAAP and adjusted operating margins to reach approximately 10.1 percent and 10.3 percent, respectively.

“As we look at the remainder of the year, we remain focused on carefully managing our business and believe we can deliver about 4 percent revenue growth and an operating margin above 10 percent for the current year, which includes a significant unfavourable currency impact versus the prior year due to the stronger U.S. dollar,” added Alberini.

The company’s board of directors has approved a quarterly cash dividend of 0.225 dollars per share payable on June 24, 2022 to shareholders of record as of the close of business on June 8, 2022.

GUESS