Guess reports Q1 net revenue down by 37.6%Wednesday, 23 May 2012
Even after expanding business in key markets such as
China, Germany and Russia, Guess celebrating its 30th anniversary, couldn’t end the fiscal first quarter ended April 28, 2012 on a positive note. Company’s net earnings were reported as $26.6 million with a 37.6 per cent decrease compared to net earnings of$42.7 million for the first quarter of fiscal last year. Diluted earnings per share decreased 34.8 per cent to $0.30, compared to $0.46 for the prior-year quarter.
Paul Marciano, Chief Executive Officer, said, “We've launched great new marketing campaigns that invoke the rich tradition of Guess and reach consumers through both traditional and social media. We are developing innovative product designs to support our customers' lifestyle and reinforce our fashion authority. "
Total net revenue for the first quarter of fiscal 2013 decreased 2.2 per cent to $579.3 million from $592.2 million in the prior-year quarter. The Company's retail stores in North America generated revenue of $251.8 million in the first quarter of fiscal 2013, a 1.8 per cent increase from $247.5 million in the same period a year ago. Comparable store sales decreased 5.5 per cent in U.S. dollars and 5.1 per cent in local currency. Net revenue from the Company's Europe segment decreased 9.7 per cent to $189.8 million in the first quarter of fiscal 2013, compared to $210.2 million in the prior-year period. In local currency, net revenue decreased 4.6 per cent. On the other side, net revenue from the company's Asia segment increased 7.9 per cent to $64.8 million from $60.1 million. Net revenue from the Company's North American wholesale segment decreased 3.8 per cent to $43.9 million in the first quarter of fiscal 2013, from $45.6 million in the prior-year period. Licensing segment net revenue increased to $28.9 million from $28.8 million.
Operating earnings for the first quarter of fiscal 2013 declined 44.8 per cent to $39.1 million (including a $0.9 million unfavorable currency translation impact) from $70.9 million in the prior-year period. Operating margin in the first quarter declined 520 basis points to 6.8 per cent, compared to the prior-year quarter. The Company's effective tax rate was 32 per cent compared to 29.5 per cent for the first quarter of the prior-year.
In future, company expects consolidated net revenue to range from $2.70 billion to $2.74 billion. Operating margin is expected to be between 12.5 per cent and 13 per cent, whereas diluted earnings per share to be in the range of $2.50 to $2.65. However, for the second quarter of fiscal 2013 ending July 28, 2012, net revenue is expected to range from $625 million to $635 million. Operating margin is expected to be between 10 per cent and 10.5 per cent. Diluted earnings per share are expected to be in the range of $0.48 to $0.52. The Company also announced that its Board of Directors has approved a quarterly cash dividend of $0.20 per share on the Company's common stock.
Guess designs, markets, distributes and licenses a lifestyle collection of contemporary apparel, denim, handbags, watches, footwear and other related consumer products. As of April 28, 2012, the Company directly operated 503 retail stores in the United States and Canada and 264 retail stores in Europe, Asia and Latin America.