US: Guess Q3 profit up 32% on strong Europe, Asia sales
Trendy apparel and footwear retailer Guess Inc has posted a 32% jump in third quarter profit, helped by strong sales at its stores in Europe and Asia, and has raised its outlook for the full year.
For the three months to 3 November net earnings soared to a record $58.3m from $44.0m in the same period last year, with diluted earnings per share up 29% to $0.62 from $0.48.
Paul Marciano, chief executive officer, said the company's "solid financial performance" reflects "the global strength of our Guess brand and our highly diversified business model."
Total net revenue for the quarter increased 42.7% to $469.1m from $328.8m.
Sales at the company's 365 stores in the US and Canada rose 17.7% to $210.4m from $178.8m, with comparable store sales up 15.8%.
Net revenue from the wholesale segment, which includes the Asian operations, increased 75.0% to $76.9m from $43.9m in the prior-year period.
European revenues were up 78.8% to $159.4m from $89.1m, and licensing revenues rose 32.6% to $22.4m from $16.9m.
Operating margin improved 30 basis points to 20.4%, driven by improved leverage over occupancy, selling and administrative costs, partially offset by lower product margins.
For the nine month period, net earnings increased 53.9% to $131.3m. Total net revenue rose 44.2% to $1,235.3m, boosted by a 19.3% increase in retail store revenues in the US and Canada to $591.5m.
Nine-month wholesale revenues increased 75.6% to $193.4m, European revenues rose 88.4% to $386.2m, and licensing revenue was up 41.2% to $64.3m.
Marciano added: "We are encouraged by these results, especially in light of today's challenging retail environment.
"Based on these results and our recent sales trends, we are confident that we continue to be well positioned for the holiday selling season."
The company expects net revenues for the fiscal year ending 2 February to range from $1.68bn to $1.70bn, with diluted earnings per share from $1.93 to $1.96.
It also said that for the fiscal year ending 31 January 2009, net revenues are likely to range from $1.97bn to $2.05bn, and that diluted earnings per share are expected to be in the range of $2.35 to $2.45.
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