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Each of Guess? segments growing in first quarter
26 May '11
5 min read
Net revenue from the Company's Europe segment increased 12.4% to $210.2 million in the first quarter of fiscal 2012, compared to $187.0 million in the prior-year period. In local currency, net revenue increased 9.7%.
Net revenue from the Company's Asia segment increased 23.7% to $60.1 million in the first quarter of fiscal 2012, from $48.6 million in the prior-year period.
Net revenue from the Company's North American wholesale segment increased 6.8% to $45.6 million in the first quarter of fiscal 2012, from $42.7 million in the prior-year period.
Licensing segment net revenue increased 14.1% to $28.8 million in the first quarter of fiscal 2012, from $25.3 million in the prior-year period.
Operating earnings for the first quarter of fiscal 2012 declined slightly to $70.9 million (including a $1.0 million favorable currency translation impact) from $71.3 million in the prior-year period. Operating margin in the first quarter declined 120 basis points to 12.0%, compared to the prior-year quarter. The lower operating margin primarily reflects the impact of higher store occupancy expenses to support the expansion of retail businesses in Europe and North America. Product margins increased slightly compared to the prior-year quarter, reflecting the greater mix of retail business in Europe, partially offset by higher North American retail markdowns.
Additionally, the current quarter operating margin was negatively impacted by a shift of European revenues out of the current quarter into the fourth quarter of fiscal 2011, while the prior-year first quarter operating margin was negatively impacted by the accelerated pension cost amortization charge. Other net expense, which primarily relates to net unrealized revaluation losses on foreign currency contracts and balances, partially offset by net unrealized gains on non-operating assets, was $10.0 million for the first quarter of fiscal 2012, compared to other net income of $3.4 million in the prior-year's quarter.
Outlook
The Company updated its outlook for the fiscal year ending January 28, 2012, as follows:
• Consolidated net revenues are expected to range from $2.74 billion to $2.80 billion.
• Operating margin is expected to be between 16.5% and 17.0%.
• Diluted earnings per share are expected to be in the range of $3.30 to $3.50.
The Company's expectations for the second quarter of fiscal 2012 ending July 30, 2011, are as follows:
• Consolidated net revenues are expected to range from $645 million to $660 million.
• Operating margin is expected to be between 15.5% and 16.0%.
• Diluted earnings per share are expected to be in the range of $0.77 to $0.83.
The Company's second quarter earnings per share guidance includes a four cent favorable unrealized mark-to-market benefit related to its foreign currency contracts and balances based on its assumption that the Euro will end thesecond quarter of fiscal 2012 at a rate relatively weaker versus the US dollar than at the beginning of that same quarter.
Net revenue from the Company's Asia segment increased 23.7% to $60.1 million in the first quarter of fiscal 2012, from $48.6 million in the prior-year period.
Net revenue from the Company's North American wholesale segment increased 6.8% to $45.6 million in the first quarter of fiscal 2012, from $42.7 million in the prior-year period.
Licensing segment net revenue increased 14.1% to $28.8 million in the first quarter of fiscal 2012, from $25.3 million in the prior-year period.
Operating earnings for the first quarter of fiscal 2012 declined slightly to $70.9 million (including a $1.0 million favorable currency translation impact) from $71.3 million in the prior-year period. Operating margin in the first quarter declined 120 basis points to 12.0%, compared to the prior-year quarter. The lower operating margin primarily reflects the impact of higher store occupancy expenses to support the expansion of retail businesses in Europe and North America. Product margins increased slightly compared to the prior-year quarter, reflecting the greater mix of retail business in Europe, partially offset by higher North American retail markdowns.
Additionally, the current quarter operating margin was negatively impacted by a shift of European revenues out of the current quarter into the fourth quarter of fiscal 2011, while the prior-year first quarter operating margin was negatively impacted by the accelerated pension cost amortization charge. Other net expense, which primarily relates to net unrealized revaluation losses on foreign currency contracts and balances, partially offset by net unrealized gains on non-operating assets, was $10.0 million for the first quarter of fiscal 2012, compared to other net income of $3.4 million in the prior-year's quarter.
Outlook
The Company updated its outlook for the fiscal year ending January 28, 2012, as follows:
• Consolidated net revenues are expected to range from $2.74 billion to $2.80 billion.
• Operating margin is expected to be between 16.5% and 17.0%.
• Diluted earnings per share are expected to be in the range of $3.30 to $3.50.
The Company's expectations for the second quarter of fiscal 2012 ending July 30, 2011, are as follows:
• Consolidated net revenues are expected to range from $645 million to $660 million.
• Operating margin is expected to be between 15.5% and 16.0%.
• Diluted earnings per share are expected to be in the range of $0.77 to $0.83.
The Company's second quarter earnings per share guidance includes a four cent favorable unrealized mark-to-market benefit related to its foreign currency contracts and balances based on its assumption that the Euro will end thesecond quarter of fiscal 2012 at a rate relatively weaker versus the US dollar than at the beginning of that same quarter.
Guess? Inc
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