Guess surprises with better-than-expected Q4 earnings
Los Angeles-based fashion retailer Guess?, Inc. announced fourth-quarter earnings of $79.6 million, or $1.18 per diluted share, on Wednesday, beating analysts’ expectations and sending shares in the company up more than 25% in extended trading.
The company’s quarterly earnings represented a 242.6% increase from income of $23.2 million, or $0.28 per diluted share, in the same period in the previous year. Guess’ adjusted earnings per share for the fourth quarter ended February 1, 2020 were $1.22, above the $1.12 estimated by analysts polled by Thomson Reuters.
Total net revenue for the quarter increased 0.6% (1.8% in constant currencies) to $842.3 million, up from $837.1 million in the prior-year period.
Growth was led by a 13.2% increase in European revenues and a 22.7% rise in licensing revenues, largely offset by a 27.7% drop in Asia. American retail and wholesale revenues also decreased 4.1% and 3%, respectively.
For the full fiscal year, the company reported net earnings of $96.0 million, or $1.33 per diluted share, up from $14.1 million, or $0.16 per diluted share, in the previous year.
Annual net revenue was $2.68 billion, a 2.6% increase (5.4% in constant currencies) from $2.61 billion in the prior year. Here, an increase of 9.2% in European sales and a 9.1% rise in American wholesale revenues were partially offset by a 10.8% decline in Asia and a 1.6% decrease in American retail sales. Licensing revenues increased 3.2%.
On Monday, Guess announced that, like many other North American retailers, it is temporarily closing its stores in the U.S. and Canada to help counteract the spread of the novel coronavirus Covid-19. Guess retail locations in these countries are currently expected to reopen on March 27.
The retailer’s stores in a number of European countries have also been closed as part of efforts to slow the propagation of the virus on the continent, while in China, where Guess shut stores at the start of the coronavirus outbreak, most of the company’s locations have now reopened.
“We closed the year with strong liquidity and a solid balance sheet, which positions us well to navigate through the current coronavirus crisis,” said Guess CEO Carlos Alberini in a release. “While we hope that the crisis will be temporary, we do expect it will have a significant negative impact on our financial results for the first quarter and may impact future results, including potential disruptions in our supply chain.”
Due to the uncertainty currently surrounding the rapidly evolving pandemic, Guess did not provide financial guidance for the first quarter currently in progress, nor for the full fiscal year ending January 30, 2021.
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