US: Guess shares slide on outlook as earnings fall
- Q$ earnings down 4%
- Operating margin down 110 bsp
- Sales fall 5.7%
Challenging traffic trends and a heavily promotional retail environment in North American weighed on earnings for US apparel retailer Guess Inc in the fourth quarter.
Shares fell 6.7% to $26.83 in after-hours trading yesterday (19 March) after the company warned revenues in its developed businesses are expected to be under pressure in fiscal 2015.
Earnings in the three months ended 1 February were down 4% to US$69.6m from $72.5m a year earlier. Adjusted operating margin was down 110 basis points to 13.6%, reflecting the impact of increased markdowns and the impact of negative same store sales on the company's fixed cost structure in North America and lower wholesale shipments in Europe.
Guess, which has been streamlining its business in an effort to improve its performance, revealed a sales decline of 5.7% to $768.4m.
In North American, retail revenues were down 6%, while comparable sales dropped 4%. Asian revenues decreased 1%, and in Europe, revenues slid 4%.
CEO Paul Marciano said the results were consistent with its expectations from an operations perspective, but said that in North America, the traffic into its stores, in addition to the overall promotional environment, remains "challenging".
He added: "For fiscal year 2015, we still expect sales in our more developed businesses to be under pressure, especially in our own stores in North America and our European wholesale channel.
"We will continue to invest in new markets like Japan and Brazil as well as fully execute our omni-channel strategy. We will also keep on investing in marketing. While I recognize that there are many challenges ahead of us, I am very confident in the strength of the Guess brand and with the senior leadership team we have in place to move us forward."
For the first quarter, Guess has forecast for a diluted net loss per share in the range of $0.09 to $0.05, and revenue of $520m to $535m.
- Why fast fashion isn't a case of one size fits all
- Sir Philip Green blamed for the collapse of BHS
- Why Inditex is "clear winner" in fast fashion
- Brexit blow to global apparel industry confidence
- TPP tariff phase-out guides Vietnam sourcing plans
- VF Corp cuts guidance as Q2 profit plunges 70%
- Vietnam mulls wage freeze to boost competitiveness
- US Q2 in brief - Carter's, Wolverine Worldwide
- Teijin launches polyester hook-and-loop fastener
- Ethiopia opens flagship textile and apparel park
- Central America strategic sourcing review - a focus on Guatemala, El Salvador and Honduras
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- Southeast Asia & Central America strategic sourcing reviews package deal
- World Textile and Apparel Trade and Production Trends: the EU - June 2016
- Primark Stores Limited: Retailing - Company Profile & SWOT Analysis