Guess exceeds expectations in the first quarter, despite soft sales in the U.S.
today May 25, 2017
Guess Inc. exceeded expectations with its first quarter financial results. Revenues increased 2 percent to $459 million, with particular gains in Europe and Asia offsetting slower sales in the U.S.
The strongest increase in revenues for the Los Angeles-based company came from Europe, where revenues increased 23.3 percent. The Asian market saw a 16.9 percent increase. In a significant decrease, the company’s licensing revenues fell 9.3 percent. In the Americas, same-store sales (e-commerce included) were down 15%.
A narrower loss than expected was reported, at $21.3 million compared to the last fiscal year's loss of $25.2 million.
Guess has struggled to maintain relevancy in the U.S market. CEO Victor Herrero says the company will continue to attempt to improve its profitability in the U.S. and increase its appeal to millennial and Gen Z consumers. The company recently announced it would close 60 stores in the fiscal year of 2018 and rebrand its Marciano label as Marciano Los Angeles to appeal to a more sophisticated customer base.
“The Guess Brand has always been associated with Sexy, and Sexy is being more broadly interpreted where anyone can be sexy. Authenticity is “in,” and being real is more important than being perfect. The millennial and Gen Z consumer is seeking purpose-driven brands whose values align with their own. As always, we are adapting to this changing environment,” Herrero said of the evolving market.
For the following quarter, the company expects revenues to increase between 2 and 4 percent, with a total increase between 3.5 and 5 percent for the fiscal year of 2018.
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