Guess? North American retail revenues up 20%

04 Sep '08

5 min read

Operating earnings for the second quarter of fiscal 2009 increased 43.2% to $85.0 million (including a $5.9 million favorable currency translation benefit) from $59.4 million in the prior-year period.

Last year's second quarter operating results benefited from a $3.1 million cumulative gift card breakage adjustment. Operating margin in the second quarter increased 120 basis points to 16.5%, compared to the prior year's quarter.

This margin expansion was the result of higher European product margins (including the impact of the strong Euro), a higher mix of European business, and operating expense leverage in North America and Europe.

These were partially offset by lower North American product margins (including the impact of last year's cumulative gift card breakage adjustment), and additional expenses to support new businesses, including Asia.

The Company's effective tax rate for the second quarter of fiscal 2009 was 36.0%, down from 39.1% for the second quarter of the prior year.

For the six months ended August 2, 2008, the Company reported net earnings of $101.6 million, an increase of 39.2% compared to net earnings of $73.0 million for the six months ended August 4, 2007.

Diluted earnings per share increased 38.5% to $1.08 per share in the first six months of the current 2009 fiscal year versus $0.78 per share in the comparable six-month period last year.

Total net revenue for the first six months of fiscal 2009 increased 31.1% to $1,004.4 million from $766.2 million in the prior-year period. The Company's retail stores in North America generated revenue of $454.3 million in the first six months of fiscal 2009, a 19.2% increase from $381.1 million in the same period a year ago.

Comparable store sales increased 7.6% for the six months ended August 2, 2008, compared to the six months ended August 4, 2007. Net revenue from the Company's wholesale segment, which includes the Company's Asian operations, increased 26.6% to $147.5 million in the first six months of fiscal 2009, from $116.5 million in the prior-year period.

Net revenue from the Company's European segment increased 55.6% to $352.9 million in the first six months of fiscal 2009, compared to $226.8 million in the prior-year period. Licensing segment net revenue increased 18.7% to $49.7 million in the first six months of fiscal 2009, from $41.9 million in the prior-year period.

Operating earnings for the first six months of fiscal 2009 increased 37.2% to $160.9 million (including an $11.8 million favorable currency translation benefit) from $117.3 million in the prior-year period. Operating margin in the first six months of fiscal 2009 improved 70 basis points to 16.0%, compared to the prior-year period.

This margin expansion was the result of higher European product margins (including the impact of the strong Euro), and a higher mix of European business, partially offset by lower North American product margins.

Guess? Inc

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