Guess reports 41.3 percent decrease in Q3 earnings

REPORT_ For the third quarter of fiscal 2015, Guess recorded net earnings of 20.8 million dollars, a 41.3 percent decrease compared to adjusted net earnings of 35.4 million dollars for the third quarter of fiscal 2014. Diluted earnings per share decreased 42.9 percent to 0.24 dollars, compared to adjusted diluted earnings per share of 0.42 dollars for the prior-year quarter.

Paul Marciano, Chief Executive Officer, commented on the third quarter performance saying, “Third quarter results were within the range of our expectations from an operations perspective. In North America, store traffic and the promotional environment remained headwinds. We continued to see good momentum in our North American e-commerce business with an almost 40 percent increase in the top-line. Going into the fourth quarter, overall trends in North America have softened compared to the third quarter. In Europe, softer traffic in the third quarter drove lower retail sales than expected, however trends have improved so far in the fourth quarter.”

Total net revenue for the third quarter of fiscal 2015 decreased 3.9 percent to 589.8 million dollars, from 613.5 million dollars in the prior-year quarter. In constant currency, total net revenue decreased 2.6 percent. The company's retail stores and e-commerce sites in North America generated revenue of 243.2 million dollars, a 4.2 percent decrease compared to the same period a year ago. Comparable store sales including the results of e-commerce sites decreased 4.8 percent in US dollars and 3.5 percent in constant currency compared to the same period a year ago.

Net revenue from the company's Europe segment decreased 5.5 percent to 189.9 million dollars in the third quarter of fiscal 2015, from 200.9 million dollars in the prior-year period. In local currency, net revenue decreased 2.5 percent. Net revenue from the company's Asia segment decreased 2 percent compared to the prior-year period. In constant currency, net revenue decreased 5.1 percent. Net revenue from the company's North American Wholesale segment was relatively flat. In constant currency, net revenue increased 1.6 percent. Licensing segment net revenue decreased 1.4 percent against the prior-year period.

Net earnings for the nine months ended November 1, 2014 were 40.6 million dollars, a decrease of 55.5 percent compared to adjusted net earnings of 91.4 million dollars for the nine months ended November 2, 2013. Diluted earnings per share decreased 56.1 percent to 0.47 dollars, compared to adjusted diluted earnings per share of 1.07 dollars for the prior-year period.

Total net revenue for the first nine months decreased 4.5 percent to 1.72 billion dollars, from 1.80 billion dollars in the prior-year period. In constant currency, total net revenue decreased 4.8 percent. The company's retail stores and e-commerce sites in North America generated revenue of 715.6 million dollars, a 4.1 percent decrease from the same period a year ago. Comparable store sales including the results of our e-commerce sites for the nine months ended November 1, 2014 decreased 4.9 percent in US dollars and 3.7 percent in constant currency compared to the same period a year ago.

Net revenue from the company's Europe segment decreased 5.3 percent, in local currency, net revenue decreased 6.9 percent. Net revenue from the company's Asia segment decreased 1.9 percent and 6 percent in constant currency. Net revenue from the Company's North American Wholesale segment decreased 5.6 percent, in constant currency, net revenue decreased 3.7 percent. Licensing segment net revenue decreased 6 percent.

The company's expectations for the fourth quarter of fiscal 2015 ending January 31, 2015, include consolidated net revenues in the range of 695 million dollars to 710 million dollars, operating margin between 9.5 percent and 11.5 percent and diluted earnings per share in the range of 0.53 dollars to 0.63 dollars. The company has also updated its outlook for the fiscal year ending January 31, 2015, which now assumes consolidated net revenues in the range from 2.42 billion dollars to 2.43 billion dollars, operating margin between 5 percent and 5.5 percent and diluted earnings per share in the range of 1 dollar to 1.10 dollars.

The company also announced today that its Board of Directors has approved a quarterly cash dividend of 0.225 dollars per share on the company's common stock. The dividend will be payable on January 2, 2015 to shareholders of record at the close of business on December 17, 2014.