Guess Earnings and Guidance Fall Flat
Guess reported mixed fiscal fourth-quarter financial results after the markets closed on Wednesday.
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Guess? Inc. (NYSE: GES) reported its fiscal fourth-quarter financial results after the markets closed on Wednesday. The company said it had $0.57 in earnings per share (EPS) on $658.3 million in revenue, which compares to consensus estimates of $0.58 in EPS on revenue of $654.7 million. In the same period of last year, the company posted EPS of $0.63 and $696.7 million in revenue.
In the fourth quarter, retail revenues for the Americas segment decreased 3% in U.S. dollars and increased 1% in constant currency. Retail comp sales including e-commerce decreased 1% in U.S. dollars and increased 2% in constant currency. Europe revenues decreased 5% in U.S. dollars and increased 6% in constant currency. Asia revenues decreased 18% in U.S. dollars and 14% in constant currency.
In terms of the outlook for the first quarter, the company expects to have a net loss per share in the range of $0.20 to $0.17 on consolidated net revenues that are expected to decline between 1.5% and 0.5% in constant currency. Currency headwinds are expected to negatively impact consolidated revenue growth by roughly 2%, for a net decline between 3.5% and 2.5%. The consensus estimates call for $0.03 in EPS on $465.93 million in revenue.
On the books, cash and cash equivalents totaled $445.5 million at the end of the quarter, compared to $483.5 million in the same period from the previous year.
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Guess CEO Victor Herrero commented on earnings:
Turning to the outlook for the next three years, based on the Strategic Initiatives that I have mentioned in the last two earnings calls, we are planning for our annual revenues to reach $3.0 billion in three years at prevailing currency rates. This $800 million increase is expected to be driven by growth in E-commerce, retail expansion and positive comp store sales. In terms of regional growth, we expect $300 million of this increase to be driven by the Americas, $300 million by Europe and $200 million by Asia. Again, assuming currencies remain at prevailing levels, we are planning for operating margin to reach 7.5% in three years, mainly driven by leverage, and for earnings per share to increase at a compound annual growth rate of 20%. Overall, more than ever, I truly believe in the potential of the Guess Brand and these three-year plans are a reflection of that.
Shares of Guess were trading down over 15% at $18.06 on Thursday, with a consensus analyst price target of $20.91 and a 52-week trading range of $16.61 to $23.45.
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Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics. Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications. A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.
