Guess', Inc. (GES) on Q3 2021 Results - Earnings Call Transcript
Operator: Good day, everyone, and welcome to the Guess? Third Quarter Fiscal 2021 Earnings Conference Call. On the call are Carlos Alberini, Chief Executive Officer; and Katie Anderson, Chief Financial Officer. During today's call, the company will be making forward-looking statements including comments regarding future plans, strategic initiatives, capital allocation and short and long-term outlook, including potential impacts from the coronavirus pandemic. The company's actual results may differ materially from current expectations based on risk factors included in today's press release and the company's quarterly and annual reports filed with the SEC. Comments will also reference certain non-GAAP or adjusted measures. GAAP reconciliations and descriptions of the measures can be found in today's earnings release. Carlos Alberini: Thank you, operator, good afternoon and thank you all for joining us today. First, I hope you're all safe and healthy in light of the current challenges. At Guess?, we continue to control what we can control, and to make the health and well-being of our teams, our customers and the communities we serve, our highest priority. Fortunately, with good planning and careful execution, we have been able to protect our people effectively. I'm very pleased to report that our team continues to excel in this environment. At times like these resilience, the ability to adapt, fast decision making and strong execution are proving critical to win and our team has exhibited every one of these traits at every turn. This crisis continues to test us all and now with second waves in multiple places, it is clear that we are not running a sprint but a Marathon. We continue to stay focused on servicing our customers well, managing our cost structure tightly, optimizing margins and controlling our inventories, balance sheet and liquidity. On behalf of Paul and myself, I want to thank every member of our team. You are doing a great job and you make us very proud. I will now spend a few minutes on our results for the third quarter and then I will touch on how we are approaching the holiday selling season. After that I will comment on our strategic business planning process and highlight key accomplishments for the period. I'm pleased to report that we had a very good third quarter where we exceeded our top line expectations and delivered a very strong bottom line, reporting adjusted earnings per share of $0.58 versus $0.22 last year. In the quarter, we more than doubled our adjusted operating profit and achieved an adjusted operating margin of 9.7%, which represents a 600 basis points expansion versus last year. It's worth noting that we delivered strong earnings on an 8% decrease in revenues for the period. In a very challenging environment, we achieved very solid gross margin performance and deliver healthy operating margin expansion in most of our businesses. The most significant improvement was driven by our business in Europe, which benefited from increased wholesale revenues. We enable the increased revenues when we elongated the fall winter season shipping window and canceled the development of the pre-spring-summer line. This proved to be a great strategy and represented a revenue increase in the period for Europe of about $50 million. Katie Anderson: Thank you, Carlos. Good afternoon, everyone. So today is my one-year anniversary at Guess?, exactly a year ago we were presenting our strategic business plan to you, little did I know then that we were going to have the year that would follow. Today, I am very proud to report our results for the third quarter, which I believe demonstrate the power of agile planning and solid execution. In the midst of a very challenging environment, we delivered substantial sequential improvement in sales, exceeding our expectations, significantly expanded operating margins and tightly managed inventory and working capital. We are extremely happy with our liquidity position, which is especially strong given the extraordinary circumstances that we have faced so far this year. This is evidence that we've been able to adjust our cost structure and capital spending to partially offset the deceleration in demand that our industry has experienced throughout the pandemic. But as importantly as knowing what the cut is knowing when and where to invest to fuel future growth in the company, while maintaining liquidity and profitability. We continue to support our efforts in digital and omnichannel initiatives, as well as investments to support long-term cost savings. And we continue to return value to our shareholders. Our Board has approved the payment of the cash dividend again this quarter. As I said, last time we spoke, our long-term capital allocation strategy has not changed. Now, let me take you through some of the details on our performance for the quarter. Let's start with sales. Third quarter revenues were $569 million, down 8% in US dollars and 10% in constant currency. The biggest driver in our improvement versus last quarter was wholesale in Europe, which was up 39% in constant currency versus last year. As Carlos mentioned, we elongated the fall/winter season shipping window and canceled the development of the pre-spring/summer line, which resulted in higher revenues this quarter versus last year. In retail store comps in the US and Canada were down 23% in constant currency in line with Q2 as momentum in the US was offset by softening in Canada, due to traffic declines as a result of the pandemic. Europe and Asia, both showed an improvement in store sales this quarter. Store comps were down 18% in Europe in constant currency, we have strong momentum was tempered in the last week of the quarter by shutdowns, due to the second wave of the pandemic. Store comps were down 17% in Asia in constant currency, driven by strengthening in China and Korea. Operator: Thank you. We will now begin the question-and-answer session. Our first question comes from Susan Anderson from B. Riley FBR. Your line is now open. Susan Anderson: Hi, good evening. Nice job managing through the quarter of a tough environment. Hi, Carlos. Carlos Alberini: Hi, Susan. Thank you. Susan Anderson: Sure. I was wondering, if you could maybe give some color on just, kind of, the trends you saw from October to November. I mean, definitely sounds like Europe slowed, because of the shutdowns there. But maybe in the Americas, what you saw? And then any color you could also give that you saw over the Black Friday week both online and in stores? Carlos Alberini: Yes. I think -- no, definitely. It's -- this is -- we are in the middle of a very, very significant time for us. As you know, we have several important weeks in front of us and curious where we have the biggest volumes and this is true both in Americas and then also in Europe as well. So what we saw in October was very, very strong for some times we saw an opportunity to increase business from where we were, comps were down 18% in the -- in Europe for Q3 that was better than the decline that we had experienced in Q2. And then, going into Americas, the comps were pretty consistent with what we had seen in Q2 are down 23%. But we felt that the business was course correcting even when traffic was still challenged as a result of the pandemic. In Asia, we had comps down 17% and that was much better than the 26% decline that we saw in Q2. Going into Thanksgiving and in the month of November things changed, we had a very good start in November as you may remember we had planned to extend the holiday selling season and tried to be more aggressive in the front end with a lot of marketing and visual and trying to invite the customers in. And that worked, I mean, we had some very good strong weeks leading into Thanksgiving and then Thanksgiving was a lot more challenging with -- well, first of all, with all the closures, shorter hours and then Thanksgiving or Black Friday was very challenging. Katie, do you want to talk about the numbers? Katie Anderson: Yes, sure. So, you know, Susan, what we're seeing is, as we come into this high-volume period, it's really, we were -- and I'll talk about the US and Canada first, we were, kind of, tracking pretty steady, a little bit better than we were doing in Q3 at the 23%, except for these super high-volume days. So we're seeing that the consumer is acting, as you would think they would in a pandemic, which is, you know, traffic is in general meaningfully down, but then also they're avoiding crowds. So in these super high-volume days like for example, Black Friday or the Saturday after that, that's where we broke the trend and things were softer than we were seeing before. So, we have -- in Europe is, kind of, the same there. Their holiday season is little more leveled, but still on these busy days that's where we're breaking the trend. But in Europe we, kind of, saw steady going into November until the last week -- or sorry into October until the last week of the quarter when we had the shutdowns. Carlos Alberini: And I would add Susan, that we were very fortunate that we started seeing some significant acceleration in our e-commerce business, as we saw the weaknesses on brick and mortar and that was something that we consider as a good goal for us and unfortunately, we are seeing that, you know, our business in the third quarter in e-com was significantly better than it was in the second quarter and we were up about 19% and that was driven primarily by Europe, which had a great third quarter. But then going into the fourth quarter in November, we have seen acceleration from those levels on both regions. And we are pleased we see a lot of opportunity. Also, keep in mind, that we went through a very challenging time when we converted the entire platform of e-commerce for both regions, that's not a small project, frankly the teams did a phenomenal job with this, the project was finished on time and the most exciting thing about this is that we are seeing an incredible improvement in performance from with this platform versus the legacy platform, we are talking, but just loading time of homepage of 3.5 times faster. We are seeing a 23% increase in conversion rates, we are seeing a lot of more engagement and more time spent on this side as a result of all this. So we are very excited and we think that now that all of this that big challenge is behind us, we have a big opportunity in front of us with e-commerce. Susan Anderson: Well, that's great to hear. And thanks for all the color there. I guess just one follow-up on the profitability side, very nice profitability in the quarter, and it sounds like fourth quarter maybe lower, because of the expense deleverage on the lower sales that -- I guess, I'm curious just in terms of the profits, how much of that is sustainable longer term? And then how much of it is -- what will you be layering more cost back on? Is the sales, kind of, get back up to speed? Carlos Alberini: Yes. let me start. Just obviously the third quarter was somewhat unusual, because of a lot of the increase in revenues relative to what we were expecting came through the wholesale business in Europe, and that was a very profitable increment to our topline. And that allowed us to leverage our cost structure much more efficiently and drove a lot of additional profitability. It -- definitely we are looking at the fourth quarter in a different way. On one hand, we have all the store closures that just represented more than 200 stores. At some point, but we are looking at a very different picture now. And then, we have this change that we made to our business at wholesale, where we decided to cancel the pre-spring/summer collection. So then we could give time to the fall-winter collection to sell through and frankly that worked. But now obviously, we are not going to ship as much of that spring/summer collection during the fourth quarter and that is impacting how the topline is going to behave. And of course, a lot of the cost structure is what it is, so -- and the fourth quarter is going to be very difficult for us to lever when you have that set of circumstances. And the good news about this is that all that revenue base that we will be losing in the fourth quarter is not lost, because the line has done very well, as I said in my prepared remarks just we are barely down to the two collections that we had last year. So we feel that this is a huge success story. And again, that revenue base is not going away, but it's going to be reported or shipped in the first quarter of next year. Katie? Katie Anderson: Yes. So Susan, we gained 200 basis points in product margin this past quarter, mostly IMU, and then we also -- as Carlos said had some leverage with our business mix on the occupancy line. We also had $8 million of rent relief in this quarter, most of that from Europe it's worth about 140 basis points. And again looking into Q4, we don't -- we're not going to see that -- we are not expecting that type of expansion, we anticipate further IMU improvements, but the pressure on the sales in that quarter we're going to have deleveraged. Susan Anderson: Got it, okay. That's really helpful. Thanks so much you guys. Good luck this holiday season. Carlos Alberini: Thank you. Thank you, Susan. Same to you. Operator: Thank you. Our next question comes from Janine Stichter from Jefferies & Company. Your line is now open. Janine Stichter: Hi, congrats on all the progress. Carlos Alberini: Thank you, Janine. Janine Stichter: You're welcome. Want to ask about the global product line, it seems like that's a pretty big accomplishment getting that completed. I want to hear more about the benefits you expect to see from that both visually in terms of global presentation then also on the IMU side and how you feel about driving efficiencies just as you're able to consolidate your buys? Thank you. Carlos Alberini: Great, thank you. Yes -- no, you just hit exactly on the key points, you know, just we think that the most important thing about this is just to present the brand on a consistent basis across the entire globe, and that is such a hard thing to do. We feel that we are finally there, we feel that the product is amazing and it's great to even see our own people, our own teams in the different territories and regions and our own customers, I mean, our wholesale customers when we did big presentation in Lugano, very recently. Just seeing everybody embracing the line for their own markets. Of course, they are going to be specific needs, and we plan to embrace those needs as well and try to really adopt certain pieces of -- or certain parts of the line. For that reason, we have kept some capsules of design teams in different places just to again augment what that core line -- mainline is going to be. We think that in addition to that, the opportunity to really make the whole product development process much more efficient is just phenomenal. We have already benefited in IMU opportunities, we have made a big effort in the last few years just trying to increase IMU very successfully. And in many cases, we were using similar fabrics, we were trying to really leverage the different vendor relationships that we had, and I think, I had -- I mentioned in a previous call that we had already consolidated our vendor base pretty dramatically, you know, just -- and that was by just using common vendors for both regions, especially Europe and the Americas. But now we have one line, that means that we can go to each of those vendors and really go with a much larger volume to really place big orders and that will result in significant reductions in costs, so that's another big opportunity. And then, when you look at internally, what it takes to develop a line. Just, I think, I mentioned in my prepared remarks that we saw a significant reduction in SKU development just because instead of doing the same thing twice, now you're going with just one SKU or one style, and when you do that obviously, the cost of development throughout the supply chain also come down significantly. So just said, I'm not in a position to tell you, okay, what is the number here. But everywhere, we are looking there are significant savings opportunities in addition to being able to position the line and the brand in a much solid tone with the customers. And the receptivity, just how people have received this has been incredible even during the time where the businesses or challenges or challenging. And, we see that many of our wholesale customers are buying more even with when you consider that the pandemic is creating significant pressure on demand. But it's very clear to us that they are buying more from what we have. And as a result, we are taking share and that's feeling very, very good today, and I think it will have a big opportunity as the next -- once we are on the other side of this, because I think that the -- those partnerships or -- we're going to continue to grow. Janine Stichter: When I think of the plan you laid out last December, I think a big piece of the margin improvement was coming from the logistics side. Maybe just update us on where you are in terms of logistics improvement? I think both in Europe and then anything that's going on globally? Thank you. Carlos Alberini: Yes. Thank you, Janine. Yes, you know, it's -- you may recall when I came back to the company. We -- the company was going through some challenging times on logistics, especially in Europe, there had been a whole reset of the network and there were several areas that were difficult there. And one of my top priorities, when I started was to address that fortunately, the team did a great job on this, as well and we were able to reduce the cost pretty significantly. We have renegotiated all those contracts that were so painful to us have backed then. And then one of the goals was to reduce the size of the network, so we thought that we had too much capacity and it was disbursed in several facilities. So we were able to close one of them in Venlo, the Netherlands and it was an expensive facility. And we were able to absorb the quantities that were being processed by that facility through the other facility that we already had there. And very, very successfully we transfer that facility to a third-party and we were able to really do that without absorbing any liabilities or the lease was taken over, the assets were paid for -- are being paid for, and we consider that a big success. And then, we are also opening a new facility for now is temporary, but we are considering the -- this new market as a long-term opportunity in Poland and labor rates are significantly lower there and we are going to be servicing our e-commerce business from there or part of it, and we are very excited about the opportunities that, that new initiative is presenting. So then you look at the Americas, I think we have some opportunities to automate some things, especially in Canada and we'll probably invest some money into this in the next couple of years. We look forward to sharing more of the plans when we have that event, when we share our strategy with you. Janine Stichter: Great, thanks so much. Carlos Alberini: Thank you, Janine. Operator: Thank you. Our next question comes from Omar Saad from Evercore ISI. Your line is now open. Omar Saad: Thanks for taking my question. Very, very nice quarter. Carlos Alberini: Thank you. How are you Omar? Omar Saad: Carlos, I want to dig -- of course, great job. Carlos, I wanted to talk to you a little bit more about the Europe strength, it was really, really big numbers there. I know things are shutdown a bit sense, but maybe you could dive in a little bit, what's at the root of the demand? It sounded like some of it's in the wholesale channel. Are you seeing, kind of, consumer social activity be it -- be the underlying driver? And then I think linked to that, you know, how does the news of the vaccine effect your outlook, especially given Guess's position important fashion brand and it's, kind of, historically tied to going out and being social. Maybe you could talk about those two, kind of, somewhat related topics. Thanks. Carlos Alberini: Yes. Thank you, Omar. Well, I mean Europe, as you know, has become our biggest business and we love to win there, of course and we consider the territory is very critical and to our long-term strategy. But also we see a lot of white space still in the territory. So we are very excited, we are relatively mature, if you look at the Southern countries, but we have a lot of opportunity and we have been winning in the Eastern countries and many other areas. When you look towards the North from those, the Mediterranean basin. And I think that, you know, the business is very well balanced. We have a very strong retail base and we have a super strong wholesale base. Wholesale, I think is probably eight consecutive seasons of growth and outstanding sell-through performance there, we were on fire they have been. And of course, we have a very mature network with eight -- more than 8,000 doors, so the distribution is very wide and very successful. Obviously, the -- if everybody is feeling the pain here through the pandemic, but our business did not fall as much -- not nearly as much as we had originally anticipated. On one hand, I talked about it on getting the season, but the other thing that it was very successful is that they did have reorders and lower returns and there were no cancellations. So all of this really resulted in a much better, stronger business. We -- after the lockdown -- just we are seeing that some of the direction that we are taking is right on for what the market needs, less -- more timeless type of product being careful with how we value the product and given more for the money, the quality that we are putting into the product is so resonating with those customers. We have a strong focus on athleisure, this is a category that we didn't even have a season ago and we just saw a -- 7% of the adult apparel sales was athleisure. So you can see what type of success we are having. Then denim carryover, this is a new program, we are using something called, you know, likely close to what you are familiar with us never out of stock type of program and this is working very well and 60% of our total denim sales are coming from that. Our handbags are just second to none, there is nothing in the marketplace that compares to what we have, the product we have at the prices we have. And then, we have a very strong line of men's in accessories and footwear, for example. So all this is driving a lot of the success. When you look at -- but when you talk about customers, I mean, we were having a very good trend in the third quarter at retail, and then obviously the second waves really impacted us tremendously. We think that this is completely temporary and we think that, that customer is just waiting and of course, yes they the celebrate socializing and everything else, but I think that once people feel better about the virus, we are going to renew that momentum very quickly. I have no doubt, so I'm very, very excited about that. And I think that people are loving the product and that is showing online. So is not that we are debt, because of this, you know, just we are seeing a big opportunity here to compensate for some of that loss of business. And the business online in Europe is up significantly, so we're very excited. Omar Saad: Carl, that's great. Really helpful color. Does the vaccine effect, how you plan for next year? And how you think about the wearing occasions that drive a lot of your brand? Carlos Alberini: It's -- you know, I mean, it's very tough to start thinking, okay, when is the vaccine going to be ready? And then based on that we are going to plan our business. Frankly, we are staying on what we can control. It's very hard to say when will we enter this post-COVID world, but in the meantime we see like three big priorities for us: one, is the product strategy; two, is how do we approach each of the business models that we have, e-com primarily, but we think that we are doing everything in line with our priority, wholesale and even stores, we think that we have done a great job in looking at the cost structure of the stores and trying to really level set and start from our zero-based type of budgeting process, and as a result of that we are -- I think, we are operating our stores much more efficiently and at a lower cost. And then, the third big thing is about our organization and what do we do to support the business and that starts with the team, but it follows with how we get organized to do more with less and use technology in our advantage and I think we are doing a lot of that. I think, I mentioned that we plan to have that, that project finished by the end of next year and we are working hard on this. Omar Saad: Now with a quarter like that during the pandemic, who needs a vaccine, congratulations. Carlos Alberini: Well, thank you, Omar. We want the vaccine. Thank you. Operator: Our next question comes from Janet Kloppenburg from JJK Research Associates Incorporated. Your line is now open. Janet Kloppenburg: Hi, everybody and congrats on a nice quarter. I wanted -- nice job. I just wondered thinking ahead to the vaccine in the recovery. Carlos, are you seeing any encouraging signs in Asia with respect to dress or special occasion or even where work products that might be wearing, it had a little bit. I'm just wondering, if we could look forward to that in Europe and in North America going forward? Carlos Alberini: Yes. Thank you, Janet. You know, that we are pleased with the performance that we had in, especially in China, but also in Korea. Korea had very good period and we are very pleased, because the second quarter was pretty tough for us, the first quarter too. But China is remarkable, because we have a very young customer base there, we think that the brand resonates with the customer there and we thought that we could do a lot of things internally to improve the business and we put a team to work together with a local team, especially on products and I think that they have done a remarkable job. And as a result of all this, we are seeing a lot of turn on the business and we couldn't be more excited. Traffic had a peak performance during Golden Week and we and our performance bottom line also has shown significant improvement as well, so we are happy. When you look at the product, we went back to our core line and we try to really be very careful with not over-buying and having the brand well represented in that market and guess what it . So, we just -- obviously we have a good business in dresses and there are some categories that you would consider at least more dressy then just at the leisure, which seems to be the only thing that has sold very well and in the other markets, while the pandemic is there. But, I think that overall in our case is not necessarily leveraging those types of products as much as representing the core brands in the right way. And then, looking at all the basics for the business we are doing, I think, a great job in presenting the product, the stores look great. I think that the team is very, very engaged and always shows tremendous energy there, and they know the markets very well. And then we did a lot of work to really clean the portfolio just in eliminating or closing stores that were not in line with the brand or that were not profitable. So we are down to 102 stores and we believe that is a good place, we are also working with the franchisees to represent us in several more secondary cities, and we had already a few relationships and we plan to have a few more by the end of the year. Operator: Thank you. Our next question comes from Dana Telsey from Telsey Advisory Group. Your line is now open. Dana Telsey: Good afternoon, everyone. As you think about the expenses and preparing for holiday and beyond. What are you seeing in terms of shipping, freight, surcharges, obviously we've heard of increases there? How are you planning for that? And are there any offsets on the expense line that we should be looking for as you continue to reinvigorate the business? Thank you. Carlos Alberini: Yes. Thank you, Dana. How are you? You know, just -- you know, I'm going to just touch on some of the comments or the question and then Katie, can probably talk about the leverage on the 4th quarter. But just -- we have done a lot of work on expenses this year, I mean, this is probably what every company has done this year, but we have really tried to go to the lower levels of expenses in every single area to protect the bottom line not knowing exactly what demand and the topline was going to look like for any of the periods, you know. But with that said, you know, it gave us an opportunity to really go at much and create a much more efficient lower cost structure in several areas and we are discovering that we can operate really well with much leaner organization. When we look at holidays that was a tricky thing, because if we wanted to make sure that we had enough resources to support the business. You asked about freight; freight is especially inbound freight has been just very, very expensive, and of course, we have been very picky with where we accelerate freight in, just depending on product categories that we thought it was worth paying the extra premiums that the market was demanding. But then, you know, just with respect to shipping costs and so forth. I think we are in pretty good shape, we have great relationships with our partners in that area and what we did was to negotiate capacity ahead of time. And that is working well for us. Katie? Katie Anderson: Yes. So Dana, as you know, we pulled a lot of expenses out of SG&A throughout the year and we'll continue to manage that really, really tightly as we come into this high volume fourth quarter, we're going to get some deleverage on the SG&A margin just because of the fixed component that SG&A has. But we'll continue to see progress on the expense line. Dana Telsey: Thank you. Carlos Alberini: Thank you. Operator: And we have no further questions in queue. At this time, I will turn the call back over to Carlos. Carlos Alberini: Thank you. Well, thank you all for your participation today. I'm really grateful that we have the opportunity, the determination and also the support to make our company better as a result of this very challenging times. We'll keep you updated on our progress and we want to wish you all a very happy holidays and a prosperous New Year. And thank you, again, for participating today. Operator: Thank you, ladies and gentlemen. This concludes today's conference call. Thank you for your participation. You may now disconnect.
Guess?, Inc. (NYSE: GES) Surpasses Financial Expectations with Strong Earnings and Revenue Growth
- Guess?, Inc. (NYSE: GES) reported earnings per share of $1.48, beating estimates and showcasing strong market performance.
- The company achieved a revenue of approximately $932.3 million, significantly exceeding expectations due to strategic acquisitions and positive momentum in their wholesale businesses.
- Guess? announced a restructuring plan and appointed Alberto Toni as the new CFO, aiming to enhance financial leadership and strategy.
Guess?, Inc. (NYSE: GES) is a global fashion brand known for its iconic denim and apparel. The company operates in the retail and wholesale sectors, with a strong presence in Europe and the Americas. GES competes with other fashion giants like Levi Strauss and H&M. Recently, GES reported impressive financial results, showcasing its robust performance in the market.
On April 3, 2025, GES reported earnings per share of $1.48, surpassing the estimated $1.41. The company also achieved a revenue of approximately $932.3 million, significantly exceeding the estimated $629.2 million. This strong performance is attributed to strategic acquisitions and positive momentum in their wholesale businesses, as highlighted by the company's recent acquisition of rag & bone.
Following these results, Guess? announced a restructuring plan to further enhance its financial leadership. Alberto Toni has been appointed as the new Chief Financial Officer, succeeding interim CFO Dennis Secor. Toni's experience as Group Managing Director and CFO of Flos B&B Italia Group S.p.A. is expected to bring valuable insights to GES's financial strategies.
The company's financial metrics reflect its strong market position. With a price-to-earnings (P/E) ratio of approximately 5.41, GES is valued relatively low compared to its earnings. Its price-to-sales ratio of about 0.17 suggests modest market valuation of its sales. The enterprise value to sales ratio is approximately 0.63, indicating a balanced valuation in relation to sales.
GES's financial health is further supported by an earnings yield of approximately 18.49%, indicating a strong return on investment for shareholders. However, the debt-to-equity ratio of about 3.27 highlights a significant level of leverage. Despite this, the current ratio of approximately 1.54 suggests that GES has a good ability to cover its short-term liabilities with its short-term assets.
Guess?, Inc. (NYSE: GES) Surpasses Financial Expectations with Strong Earnings and Revenue Growth
- Guess?, Inc. (NYSE: GES) reported earnings per share of $1.48, beating estimates and showcasing strong market performance.
- The company achieved a revenue of approximately $932.3 million, significantly exceeding expectations due to strategic acquisitions and positive momentum in their wholesale businesses.
- Guess? announced a restructuring plan and appointed Alberto Toni as the new CFO, aiming to enhance financial leadership and strategy.
Guess?, Inc. (NYSE: GES) is a global fashion brand known for its iconic denim and apparel. The company operates in the retail and wholesale sectors, with a strong presence in Europe and the Americas. GES competes with other fashion giants like Levi Strauss and H&M. Recently, GES reported impressive financial results, showcasing its robust performance in the market.
On April 3, 2025, GES reported earnings per share of $1.48, surpassing the estimated $1.41. The company also achieved a revenue of approximately $932.3 million, significantly exceeding the estimated $629.2 million. This strong performance is attributed to strategic acquisitions and positive momentum in their wholesale businesses, as highlighted by the company's recent acquisition of rag & bone.
Following these results, Guess? announced a restructuring plan to further enhance its financial leadership. Alberto Toni has been appointed as the new Chief Financial Officer, succeeding interim CFO Dennis Secor. Toni's experience as Group Managing Director and CFO of Flos B&B Italia Group S.p.A. is expected to bring valuable insights to GES's financial strategies.
The company's financial metrics reflect its strong market position. With a price-to-earnings (P/E) ratio of approximately 5.41, GES is valued relatively low compared to its earnings. Its price-to-sales ratio of about 0.17 suggests modest market valuation of its sales. The enterprise value to sales ratio is approximately 0.63, indicating a balanced valuation in relation to sales.
GES's financial health is further supported by an earnings yield of approximately 18.49%, indicating a strong return on investment for shareholders. However, the debt-to-equity ratio of about 3.27 highlights a significant level of leverage. Despite this, the current ratio of approximately 1.54 suggests that GES has a good ability to cover its short-term liabilities with its short-term assets.
Guess?, Inc. (NYSE:GES) Quarterly Earnings Preview
Guess?, Inc. (NYSE:GES) is a renowned global fashion brand set to release its quarterly earnings on April 3, 2025. With Wall Street analysts projecting an earnings per share (EPS) of $1.41 and revenues of approximately $908 million, the company's financial health is under scrutiny.
Here are three key insights from the earnings forecast:
- The consensus estimate for GES's EPS has decreased by 2.7%, now standing at $1.41 per share, indicating a significant 29.9% drop year-over-year.
- Guess? faces challenges such as weak consumer sentiment and rising freight costs, with a trailing four-quarter negative earnings surprise of 8.7% on average.
Guess?, Inc. is anticipated to witness a slight increase in its top line for the fourth quarter, with projected revenues of $899 million, reflecting a 0.9% growth from the previous year. For fiscal 2025, the company's revenues are estimated to reach $2.96 billion, indicating a 6.7% increase from the prior year.
The company is navigating through several challenges, including weak consumer sentiment, rising freight costs, and broader economic pressures. Despite these hurdles, Guess? has managed to maintain a price-to-earnings (P/E) ratio of approximately 6.02, showcasing a relatively low valuation compared to its earnings. The price-to-sales ratio stands at about 0.19, suggesting that the stock is trading at a low price relative to its sales.
However, the company's debt-to-equity ratio is about 3.27, indicating a higher level of debt compared to its equity, which could be a point of concern for investors. As the earnings release date approaches, analysts suggest that the upcoming report could significantly influence Guess?'s stock price in the near term. Investors and stakeholders are keenly awaiting the results to gauge the company's financial health and future prospects.
Guess?, Inc. (NYSE:GES) Quarterly Earnings Preview
Guess?, Inc. (NYSE:GES) is a renowned global fashion brand set to release its quarterly earnings on April 3, 2025. With Wall Street analysts projecting an earnings per share (EPS) of $1.41 and revenues of approximately $908 million, the company's financial health is under scrutiny.
Here are three key insights from the earnings forecast:
- The consensus estimate for GES's EPS has decreased by 2.7%, now standing at $1.41 per share, indicating a significant 29.9% drop year-over-year.
- Guess? faces challenges such as weak consumer sentiment and rising freight costs, with a trailing four-quarter negative earnings surprise of 8.7% on average.
Guess?, Inc. is anticipated to witness a slight increase in its top line for the fourth quarter, with projected revenues of $899 million, reflecting a 0.9% growth from the previous year. For fiscal 2025, the company's revenues are estimated to reach $2.96 billion, indicating a 6.7% increase from the prior year.
The company is navigating through several challenges, including weak consumer sentiment, rising freight costs, and broader economic pressures. Despite these hurdles, Guess? has managed to maintain a price-to-earnings (P/E) ratio of approximately 6.02, showcasing a relatively low valuation compared to its earnings. The price-to-sales ratio stands at about 0.19, suggesting that the stock is trading at a low price relative to its sales.
However, the company's debt-to-equity ratio is about 3.27, indicating a higher level of debt compared to its equity, which could be a point of concern for investors. As the earnings release date approaches, analysts suggest that the upcoming report could significantly influence Guess?'s stock price in the near term. Investors and stakeholders are keenly awaiting the results to gauge the company's financial health and future prospects.
Guess? Reports Better-Than-Expected Q1 Results
Guess? Inc (NYSE:GES) announced its Q1 earnings results yesterday. The company reported losses of $0.27 per share, which were better than the anticipated losses of $0.39 per share. Revenues came in at $592 million, exceeding the expected $576.57 million.
CEO Carlos Alberini expressed satisfaction with the company’s quarterly performance, highlighting a 4% revenue growth. This growth was driven by strong performances in the Licensing and Americas wholesale businesses, as well as robust results in Europe and Asia. However, revenues in the Americas retail segment remained flat due to lower customer traffic in certain areas.
Paul Marciano, Co-Founder and Chief Creative Officer, emphasized the recent acquisition of rag&bone and its potential for global expansion.
For fiscal 2025, the company projects an EPS range of $2.62 to $3.00, compared to the consensus estimate of $2.81.
Guess? Reports Better-Than-Expected Q1 Results
Guess? Inc (NYSE:GES) announced its Q1 earnings results yesterday. The company reported losses of $0.27 per share, which were better than the anticipated losses of $0.39 per share. Revenues came in at $592 million, exceeding the expected $576.57 million.
CEO Carlos Alberini expressed satisfaction with the company’s quarterly performance, highlighting a 4% revenue growth. This growth was driven by strong performances in the Licensing and Americas wholesale businesses, as well as robust results in Europe and Asia. However, revenues in the Americas retail segment remained flat due to lower customer traffic in certain areas.
Paul Marciano, Co-Founder and Chief Creative Officer, emphasized the recent acquisition of rag&bone and its potential for global expansion.
For fiscal 2025, the company projects an EPS range of $2.62 to $3.00, compared to the consensus estimate of $2.81.
Guess? Shares Drop 15% Following Q3 Miss
Guess? Inc. (NYSE:GES) saw a more than 13% decline in its shares intra-day today after announcing its third-quarter results. The company reported earnings per share (EPS) of $0.49, which was below the expected $0.62. While revenue increased by 3% year-over-year (1% in constant currency) to $651.2 million, it fell short of the anticipated $655.98 million.
CEO Carlos Alberini expressed concern over the current retail climate, citing global geopolitical issues and reduced consumer confidence as influencing factors. As a result, Guess? is adopting a more conservative approach for its fourth-quarter forecast. The company now expects to achieve a net revenue growth of 2% and an operating margin of approximately 9% for the fiscal year.
For the fourth quarter of fiscal year 2024, Guess? anticipates its EPS to be in the range of $1.53 to $1.60, compared to a Street estimate of $1.68. For the full year, the company's EPS projection is set at $2.67 to $2.74, lower than the expected $2.96.
