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.
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