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Apr 1, 2021
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Guess tops earnings expectations despite revenue declines

Published
Apr 1, 2021

LA-based fashion retailer Guess?, Inc. beat analysts’ predictions with Q4 earnings of $70.4 million, or $1.07 per diluted share, down from $79.6 million, or $1.18 per share, in the prior-year period.


Q4 revenue at Guess fell 23% compared to the prior-year period - Instagram: @guess

 
The company’s adjusted earnings per share for the fourth quarter ended January 30, 2021, were $1.18, representing an earnings surprise of 107.2% compared to the Zacks Consensus Estimate of $0.57, as reported by the Nasdaq website.
 
Fourth-quarter net revenue at Guess totaled $648.5 million, representing a decrease of 23.0% from $842.3 million in the same period in the previous year. The decline was 25.9% in constant currencies.

In the Americas, the company saw a revenue decrease of 24.2%, reflecting declines of 15.0% in retail comp sales including e-commerce and 15.3% in wholesale revenues. The retailer’s European operations posted a decrease of 26.8% in their revenues, despite a 2% rise in retail comp sales, including e-commerce, in the region.
 
Elsewhere, Guess’ Asian revenues fell 16.2% year over year. Licensing revenues, on the other hand, increased 12.2%.
 
“I am very pleased with our fourth quarter earnings performance, which significantly exceeded our expectations, in spite of the difficult circumstances we continued to face due to the pandemic,” said Guess CEO Carlos Alberini in a release.
 
The company’s total revenues for the full fiscal year came to $1.88 billion, down 29.9% from $2.68 billion in the previous year. Annual sales declined 37.1% in the Americas retail business and 36.9% in the region’s wholesale channel. In the company’s licensing business the decrease was 13.8%, while in Europe and Asia it was 24.6% and 32.8%, respectively.
 
Full-year net loss at Guess was $81.2 million, or a loss of $1.27 per diluted share, compared to earnings of $96.0 million, or $1.33 per diluted share, in the previous year.
 
“During the year, we made great progress executing our strategic plan and were able to accelerate the implementation of several key initiatives, including those related to customer centricity, elevating our brand, improving the quality of our product and developing one global product line,” explained Alberini.
 
Speaking of the company’s ongoing strategic plan, the CEO also highlighted that Guess is committed to achieving net revenues of $2.9 billion by fiscal 2025, as well as an operating margin of 10% and earnings per share of $3.00.
 
In the current fiscal year (2022), Guess expects that, due to continued pandemic-related shutdowns and traffic declines, its first-quarter revenues will be down in the high-single digits compared to the same period two years ago.
 
Annual revenues are also expected to be down in the high single digits versus fiscal 2020. Guess said that its predictions for fiscal 2022 were both compared to the equivalent periods in fiscal 2020 so as to provide “a more normalized comparison” with results achieved prior to the Covid-19 crisis.
 
As of January 30, 2021, Guess directly operated 1,046 retail stores in the Americas, Europe and Asia, while its partners and distributors operated a further 524 locations. The company has a presence, either directly or via partners, in some 100 countries around the world.

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