-By Ankita Dutta.
Guess Inc. has announced that its revenues for the first quarter fell 4% to $569.8m, driven by a dramatic decline in US retail and wholesale sales, partially offset by increased retail sales in Asia. The Los Angeles-based fashion brand revealed that its Americas retail revenues were down 14%, with retail comp sales, including e-commerce, down 12%. The company said its Americas wholesale revenue dropped 25%, while licensing revenues fell 10%. However, Europe revenues rose by 2%, with retail comp sales, including e-commerce, rising by 10%, and Asia revenues increased by 26%.
The company’s retail comp sales in the Asian market, including e-commerce, increased 1%. While Guess swung to a net loss of $11.8m for the first quarter, compared to last year’s net earnings of $8m for the same period, it still performed above expectations. The net loss per share for the first quarter was $0.22, compared to diluted net earnings per share $0.12 for the same period last year. Guess CEO, Carlos Alberini, expressed satisfaction with the company’s Q1 financial results that surpassed their expectations in terms of revenues, earnings per share, and operating margin. The company experienced notable strength in its international operations despite facing challenging times in the Americas retail business due to decreased customer flow into the stores. However, the firm managed to maintain solid product-margin performance and robust cost controls to offset the shortfall. Alberini also mentioned that the company’s fiscal year 2024 sales are expected to grow between 2% and 4%, with diluted earnings per share between $2.01 and $2.25 for the year. “We have full faith in our future possibilities, and are taking this opportunity to reassert our optimistic projections for the year.”
He continued to express confidence in the company’s future prospects and took the opportunity to reaffirm the affirmative outlook for the year. He highlighted a successful refinancing of the convertible bonds, indicating an increase in financial flexibility and prolongation of debt maturities beyond four years. Additionally, the firm has a steadfast commitment to ensure worthwhile returns for shareholders through the repurchase of 2.2 million shares and the board’s recent approval for a 33% rise in the quarterly dividend, now standing at $0.30 per share. Alberini expressed faith in the company’s team to execute growth plans efficiently and create value in the future.
Guess has struggled in recent years to profit from its middle-market positioning against brands that offer similar products at a cheaper price. Analysists have suggested that its higher material costs, due to the creation and use of more luxurious materials than cheaper clothing brands, make it difficult to keep prices low enough for a more everyday market.
