By  on November 2, 2006

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.

load comments
blog comments powered by Disqus