Rising sales and revenues across all business segments — with the biggest gains in Europe — spurred Guess Inc. to triple-digit earnings gains for the third quarter and first nine months of the year.
For the three months ended Sept. 30, the Los Angeles-based company reported Wednesday that earnings vaulted 133.8 percent to $48.4 million, or $1.05 a share, far outpacing Wall Street analysts'; consensus estimate of 72 cents a share. Guess reported earnings of $20.7 million, or 46 cents, in the same period a year ago.
"All our business formats across all regions of the world exceeded expectations," Paul Marciano, co-chairman and co-chief executive officer, said during a conference call with analysts.
Revenues for the period rose 31.3 percent to $348.7 million from $265.6 million. Royalties were ahead 18.3 percent, rising to $16.4 million from $13.9 million.
Sales increased 32 percent to $332.3 million, compared with $251.7 million, driven by a strong retail performance in the company';s stores across the U.S. and Canada. Guess stores generated $178.1 million during the quarter, an increase of 13.9 percent from the $156.3 million in the year-ago period. Marciano said Guess opened 10 stores in the U.S. and Canada during the quarter for a total of 330 units. Comparable-store sales gained 8.6 percent during the period, marking the 14th consecutive quarter of rising sales in stores open at least a year.
Maurice Marciano, co-chairman and co-ceo, said he sees ample opportunity for the company';s denim business to expand in the U.S. and Canada, as well.
"The trend right now in denim is, it';s going more into fashion denim...so that';s going to give us a really good opportunity," he said, adding that women';s denim would present the biggest opportunity because of the greater range of product offerings available. "The trend is cleaning up. The skinny has been a big part of the business, but as far as our business is concerned, we';ve not seen a slowdown in the boot-leg jean for women, even though the skinny has done very well."
Guess'; European business posted the largest gains during the quarter, with revenues rising 73.1 percent to $111.5 million from $64.4 million. Management has set a target of reaching $500 million in revenues in Europe in the next four years.For the nine months, earnings gained 134.7 percent to $77.5 million, or $1.69 a share, compared with $33 million, or 74 cents, in the same period a year ago. Revenues spiked 27.2 percent to $838.8 million from $659.4 million, with sales rising 27.2 percent to $794.8 million from $624.8 million and royalties increasing 26.8 percent to $43.9 million from $34.6 million.
Again, the company';s European business posted the largest gains, with revenues jumping 60 percent to $209.5 million from $131 million. Wholesale revenues rose 18.4 percent to $104.3 million from $88.1 million, while retail operations generated revenue increases of 18.6 percent to $481 million from $405.7 million.
The company also announced comp-store sales results for October, with the U.S. and Canada posting 11.8 percent gains. For the month, total retail sales rose 17.6 percent to $45.5 million.
The firm has a multibrand portfolio that includes Guess, Guess by Marciano, Marciano Guess Accessories and a new retail format that will roll out in North America next year called G by Guess, which is targeted to compete with retailers such as Hollister.
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