Pinched by an impairment charge and lower margins and same-store sales, Guess Inc. late Tuesday posted lower fourth-quarter results, but finished the year with a stronger bottom line.
For the three months ended Jan. 31, income fell 13.2 percent to $47.9 million, or 52 cents a diluted share, from $55.2 million, or 59 cents, in the year-ago quarter. Excluding a noncash asset impairment charge of $22.3 million for long-lived assets connected with retail stores in North America and Asia, income in the current quarter would have been up 12.1 percent to $62 million, or 67 cents, which was 16 cents above analysts’ consensus estimates.
Total revenues rose 9 percent to $561.1 million from $514.6 million as sales, exclusive of royalties, rose 10.3 percent to $538.4 million from $488.1 million. Retail sales in the U.S. rose 6.5 percent to $288.6 million, although comparable-store sales were down 6.5 percent. Gross margin fell to 40.5 percent of sales from 45.4 percent in the prior-year period.
Paul Marciano, chief executive officer, told Wall Street analysts during a conference call that the company’s wholesale segment grew during the quarter, driven by South Korea and China, where Guess continues to invest with new stores. He said the company will keep expanding internationally, particularly since the brand is still “very underpenetrated” in markets such as Germany, Russia, Spain and the U.K.
Marciano noted the brands under the Guess umbrella are positioned to benefit from customers who are trading down from luxury brands that cost more.
Carlos Alberini, president and chief operating officer, said the firm has reduced its inventory position through a combination of initiatives that involve additional promotions at the store level and purchase-order cancellation.
“Every promotional event was planned to protect the integrity of our brands and benefit our most loyal customers,” he said.
In addition, the company has “strengthened” its supply chain and reduced lead times in many categories by “securing fabric ownership and strategic vendor entrepreneurships,” Alberini said.
He explained the company can respond quickly to market demands and at the same time protect its business and margin structure with less inventory risk.
For the year, income rose 14.5 percent to $213.6 million, or $2.28 a diluted share, from $186.5 million, or $1.99, in the prior year. Total revenues gained 19.6 percent to $2.09 billion from $1.75 billion.
The company forecasted diluted earnings per share at between 26 and 30 cents for the first quarter, below both analysts’ estimates and year-ago performance, but declined to project results for the remainder of the year due to the economic uncertainty.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over the top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty