Guess struggles continue in the Americas, to close 60 stores as earnings plunge
Mixed fortunes for Guess on Wednesday, as negative news outweighed any positives. Its shares fell over 12.5% in extended trading after the US casualwear retailer’s Q4 earnings and Q1 outlook fell heavily short of analysts’ expectations. There was also news of another 60 stores to close in its soft core Americas market as the retailer continues to expand in its much stronger Europe and Asia markets.
Final quarter profits plunged 86% to $6.6m/$0.08 per share from $47.8m/$0.57 a year ago. Adjusted earnings for the quarter came in at $0.41 per share, below analysts’ call for $0.44.
Revenues for the quarter at least rose 3.2% to $679.3m, driven by strength in Asia and Europe offsetting a still weak Americas market. But even they were short of the $685.98m analysts expected.
European retail revenues rose 11%, driven by new stores, Asia increased 29%, again on new stores, while China comps also rose. The Americas’ revenues fell 6.4% while retail comps in North America fell 7%.
CEO Victor Herrero said he was “pleased” with the retailer’s revenue performance “despite continued softness in the Americas” where it plans to shutter 60 stores in fiscal 2018.
Guess said it expects a Q1 loss per share of $0.33-$0.30 per share and revenues to increase 2-4%. Analysts estimate loss of $0.16 per share and revenues to increase 1.5%.
For the full year, Guess expects revenue growth of 4-6% alongside earnings of $0.28-$0.40 per share. Analysts estimate earnings of $0.64 per share on revenue growth of 3.9% for the year.