Guess Inc. Wednesday joined the crowd of apparel firms exceeding second-quarter expectations while providing cautious guidance for the remainder of the year.
For the three months ended July 31, earnings attributable to Guess grew 12.1 percent to $66.8 million, or 72 cents a diluted share, from $59.6 million, or 64 cents, in the year-ago quarter. Wall Street analysts were expecting earnings per share of 68 cents for the quarter, according to Yahoo Finance.
Revenues rose 10.5 percent to $577.1 million from $522.4 million, including a 10 percent gain in sales to $550.6 million from $500.4 million.
The Los Angeles-based firm’s North American retail stores posted a 6.3 percent increase in sales to $241.8 million on a comparable-store sales gain of 3.5 percent. North American wholesale sales were up 33.3 percent to $44.3 million, while the European segment rose 5.8 percent to $222.3 million. Asian sales jumped 42.8 percent to $42.2 million. Guess doesn’t separate its wholesale and retail sales outside North America.
The company said operating margins in the quarter fell 70 basis points to 16.7 percent of sales compared with the prior year’s quarter, a reflection of lower North American product margins and high occupancy costs due to the firm’s global retail expansion.
Paul Marciano, chief executive officer, said the results “exceeded our expectations for both top-line and bottom-line growth. Each one of our business segments increased revenues, and we made excellent progress in our efforts to grow our international businesses.”
Marciano noted, “We remain fully committed to expanding our business internationally, and developing Europe and Asia remain our top priorities.” He pointed out that European and Asian expansion accounted for nearly half of revenue growth, “despite the headwind caused by the stronger U.S. dollar.”
In the quarter, the company spent $49.3 million to repurchase 1.5 million shares of common stock, at an average purchase price of $32.88. Guess said as of July 31, it had authorization to purchase another $84.9 million of stock under a previously approved program.
For the third quarter, Guess is expecting diluted EPS of 55 cents to 58 cents on a revenue forecast of $565 million to $580 million. For the full year ending Jan. 31, Guess expects diluted EPS of between $2.80 and $2.85 on a revenue range of $2.35 billion to $2.40 billion. Analysts had expected 57 cents for the quarter and $2.92 for the year.
With the full-year guidance falling below analysts’ consensus estimates for EPS of $2.92, shares fell more than 8 percent in after-hours trading. Prior to the after-market release of results, they finished the day at $38.23, up 78 cents, or 2.1 percent.
For the six months, earnings were up 27.1 percent to $117.1 million, or $1.25 a diluted share, from $92.1 million, or 99 cents, last year. Revenues rose 15.9 percent to $1.12 billion from $963.6 million, with sales growing 15.8 percent to $1.06 billion from $919.5 million.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast