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Q2FY16 net income down 16.7% at clothing retailer Guess
28
Aug '15
For the second fiscal quarter ended August 1, 2015 net income at clothing retailer Guess dipped to $18.3 million, down 16.7 per cent as compared to $22.0 million for the second quarter of fiscal 2015.

“Diluted earnings per share however declined higher at 19.2 per cent to $0.21 as against $0.26 for the prior fiscal second quarter,” a Guess press release stated.

“The negative impact of currency on earnings per share in the second quarter of fiscal 2016 was approximately 10 cents,” the retailer informed.

Total net revenue for the reporting quarter also dropped 10.2 per cent to $546.3 million from $608.6 million in the comparable quarter of fiscal 2015, while it inched down 0.6 per cent in constant currency.

The Company's retail stores and e-commerce sites in the Americas generated revenue of $232.5 million in the second quarter of fiscal 2016, down 4.7 per cent year over year.

Comparable store sales including the results of its e-commerce sites in the US and Canada for the second quarter of fiscal 2016 fell 2.8 per cent in US dollars and was relatively flat in constant currency.

For the quarter under review, net revenue from its Europe segment too reduced 15.3 per cent year on year to $199.4 million in the second quarter of fiscal 2016.

Net revenue from its Asia segment contracted 11.7 per cent from a fiscal ago quarter to $56.7 million in the second quarter of current fiscal.

Operating earnings for the second quarter of fiscal 2016 drove down 12.2 per cent year on year to $26.2 million, which includes a $4.4 million unfavourable currency translation impact.

Operating margin in the second quarter was down 10 basis points at 4.8 per cent as compared to 4.9 per cent in the previous fiscal's second quarter.

“Operating margin was negatively impacted by currency exchange rate fluctuations and charges related to legal matters,” the retailer said.

“These decreases were mostly offset by overall product margin improvements relating to higher initial mark-ups in Europe and Americas Retail and less markdowns in Americas Retail,” it informed.

Chairman Paul Marciano said, “I am pleased to report that second quarter results were better than our expectations.”

“In our Americas Retail business, comp sales ended flat for the quarter in constant currency, mainly driven by continued improvement in the performance of the womens' category,” Marciano added.

CEO Victor Herrero too said, "I have identified five initiatives that I am sure will create economic value and in the first phase, we will focus on elevating the quality of our sales organisation.”

“We will also unlock the potential of the Guess brand in Asia by working to build a major business in this region,” he too added.

“Finally we will create a culture of purpose and accountability throughout the entire company by implementing a central organisational structure focused on sales and profitability,” Herroro observed. (AR)

Fibre2Fashion News Desk – India

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