Management team of Guess? continues to execute well

01 Dec '09

4 min read

Guess, Inc. reported financial results for the third quarter of its 2010 fiscal year, which ended October 31, 2009.

• Global revenues reached $523 million, compared to $528 million last year
• Product margins improved across all business segments
• Operating margin reached 18.9% vs. 18.8% last year
• Cash increased to $345 million, compared to $237 million last year

Third Quarter Fiscal 2010 Results

For the third quarter of fiscal 2010, the Company reported record net earnings of $64.1 million, a slight increase compared to net earnings of $64.0 million for the third quarter of fiscal 2009. Diluted earnings per share increased 3.0%, reaching $0.69, compared to $0.67 for the prior-year quarter.

Paul Marciano, Chief Executive Officer, commented, "We are very pleased with the position of our Company today. Our brand enjoys significant momentum worldwide and our management team continues to execute well. We are gaining share in key markets, generating strong cash flows and delivering solid returns. As we look into the future, we will continue to fund key growth initiatives and invest in our infrastructure. International expansion remains a high priority for us and we plan to resume retail development in North America and expand our retail presence in other countries as well."

Mr. Marciano continued, "Our third quarter financial results exceeded our expectations. Each of our businesses performed better than expected in both revenues and earnings, as our customer continued to respond well to our product assortment in all markets around the world. In addition, we managed well, controlling our costs and inventories tightly to protect our profitability. This solid performance resulted in record third quarter earnings and a significant improvement in our cash flows in the period. There have been many challenges over the past year, and we responded well to them. As a result, we are a stronger company today. Through it all, we have remained true to our brand and focused on our customer, always delivering outstanding product and improving our service in our stores. We strongly believe that we are well positioned to achieve our objectives for growth and profitability."

Total net revenue for the third quarter of fiscal 2010 decreased 1.0% to $522.8 million from $527.9 million in the prior-year quarter. Currency translation did not have a material effect on total revenues in the quarter. The Company's retail stores in North America generated net revenue of $239.5 million in the third quarter of fiscal 2010, a 1.9% increase from $235.1 million in the same period a year ago. Comparable store sales decreased 3.4% for the third quarter of fiscal 2010, compared to the same period a year ago. The Company operated 433 retail stores in the United States and Canada at the end of the third quarter of fiscal 2010 versus 422 stores a year earlier.

Net revenue from the Company's wholesale segment, which includes the Company's Asian operations, increased 10.0% to $86.7 million in the third quarter of fiscal 2010, from $78.8 million in the prior-year period.

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