Guess? North American retail revenues up 12%

15 Dec '08

5 min read

Operating earnings for the third quarter of fiscal 2009 increased 3.9% to $99.4 million (including a $1.5 million favorable currency translation impact) from $95.6 million in the prior-year period. Operating margin in the third quarter decreased 160 basis points to 18.8%, compared to the prior year's quarter. This margin decline resulted from lower gross margins in North America, the impact of negative same store sales growth on North American retail operating expenses and higher expenses in Europe due to infrastructure investments and to support new businesses. These were partially offset by higher European product margins, a higher mix of European and licensing businesses and lower corporate overhead expenses.

The Company's effective tax rate for the third quarter of fiscal 2009 was 33.1%, down from 38.8% for the third quarter of the prior year.

For the nine months ended November 1, 2008, the Company reported net earnings of $165.7 million, an increase of 26.2% compared to net earnings of $131.3 million for the nine months ended November 3, 2007. Diluted earnings per share increased 26.4% to $1.77 per share in the first nine months of the current 2009 fiscal year versus $1.40 per share in the comparable nine-month period last year.

Total net revenue for the first nine months of fiscal 2009 increased 24.0% to $1,532.3 million from $1,235.3 million in the prior-year period. The Company's retail stores in North America generated revenue of $689.4 million in the first nine months of fiscal 2009, a 16.5% increase from $591.5 million in the same period a year ago. Comparable store sales increased 4.6% for the nine months ended November 1, 2008, compared to the nine months ended November 3, 2007.

Operating earnings for the first nine months of fiscal 2009 increased 22.2% to $260.3 million (including a $12.8 million favorable currency translation benefit) from $212.9 million in the prior-year period. Operating margin in the first nine months of fiscal 2009 remained essentially flat at 17.0% when compared to the prior-year period.

The Company provided the following expectations for its fourth quarter ending January 31, 2009:

- Consolidated net revenues are expected to range from $500 million to $540 million.
- Operating margin is expected to be about 14%.
- Diluted earnings per share are expected to be in the range of $0.50 to $0.55.

The Company updated its outlook for the fiscal year ending January 31, 2009, which is now as follows:
- Consolidated net revenues are expected to range from $2.03 billion to $2.07 billion.
- Operating margin is expected to be about 16%.
- Diluted earnings per share are expected to be in the range of $2.27 to $2.32.

The Company also announced that its Board of Directors has approved a quarterly cash dividend of $0.10 per share on the Company's common stock. This dividend will be payable on January 2, 2009 to shareholders of record at the close of business on December 17, 2008.

Guess? Inc

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