Commanding sales increases at its stores in Europe and Asia helped Guess Inc. generate a 7.7 percent jump in third-quarter earnings, allowing the contemporary apparel retailer to easily beat analysts’ earnings expectations Tuesday.
The Los Angeles-based firm also provided annual earnings guidance that topped Wall Street’s predictions.
Net income for the period ended Oct. 30 grew to $70.1 million, or 75 cents a diluted share, compared with a profit of $65.1 million, or 69 cents a share, in the year-ago quarter. Net revenues spiked 17.4 percent, to $580.9 million from $495 million in the 2009 period. Wall Street forecasted EPS of 59 cents on sales of $580.4 million.
Sales at retail stores in North America increased 5.9 percent to $253.7 million as same-store sales rose 1.5 percent. Wholesale volume in North America climbed 22 percent to $59.3 million and licensing revenues expanded 18.6 percent to $33 million.
Revenue in Europe soared 28 percent, or $216.2 million, while in Asia, it jumped 35.1 percent to $54.8 million.
Higher markdowns and an increase in occupancy rates due to store opening costs caused gross margin to contract to 45.9 percent of sales in the quarter, compared with year-ago margin of 47.9 percent.
“We strive to constantly adapt ourselves while staying true to who we are,” said chief executive officer Paul Marciano on the company call. “It is this consistency of mission and vision that we repeat time after time to our partners and our customers around the world, which we also believe is our most valuable asset to succeed on a global scale.”
Management added that it expects accessories and footwear to “bolster holiday sales.”
For the nine months, Guess recorded a 19.4 percent leap in net income to $189.1 million, or $2 a diluted share, compared with income of $158.4 million, or $1.68 a share. Net sales rose 16.3 percent to $1.65 billion, from $1.41 billion in 2009.
Looking to the fourth quarter, Guess projected EPS of between $1.02 and $1.06 a share on sales in the range of $710 million to $730 million. Full-year EPS is expected to be between $3.02 and $3.06 a share on revenue in the range of $2.44 billion to $2.46 billion.
Analysts had anticipated quarterly EPS of $1.02 a share on sales of $694.6 million, and annual EPS of $2.92 on revenues of $2.39 billion.
Guess also increased its quarterly dividend 25 percent to 20 cents a share and said it would pay a special dividend of $2 a share on Dec. 23 to shareholers of record Dec. 8.
Earnings were reported after the close of the markets. Shares of Guess closed unchanged in New York Stock Exchange trading Tuesday at $45.34.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews