Q4 revenues up 3% to record $776 mn, Guess? Inc

17 Mar '12

6 min read

- Net revenue from the Company's Europe segment decreased 1.4% to $290.8 million in the fourth quarter of fiscal 2012, compared to $294.9 million in the prior-year period. In local currency, net revenue increased 0.5%.
- Net revenue from the Company's Asia segment increased 27.5% to $70.6 million in the fourth quarter of fiscal 2012, from $55.4 million in the prior-year period. In constant dollars, net revenue increased 27.7%.
- Net revenue from the Company's North American Wholesale segment increased 7.5% to $40.5 million in the fourth quarter of fiscal 2012, from $37.7 million in the prior-year period. In constant dollars, net revenue increased 9.2%.
- Licensing segment net revenue in the fourth quarter of fiscal 2012 was flat with the prior-year period at $30.4 million.

Operating earnings for the fourth quarter of fiscal 2012 decreased 5.9% to $135.8 million (including a $1.8 million unfavorable currency translation impact) from $144.3 million in the prior-year period. Operating margin in the fourth quarter decreased 160 basis points to 17.5%, compared to the prior-year quarter as improved product margins were more than offset by higher occupancy and SG&A rates. The improvement in product margins was driven by lower markdowns in North America and greater European retail mix.

The increase in the occupancy rate resulted from negative comparable store sales in North America and Europe and store expansion in Europe. The SG&A rate increased as higher selling and distribution costs in Europe, store impairment charges and higher advertising expenses more than offset reductions in North American store selling expenses.

Other net income, which primarily includes net unrealized mark-to-market gains on foreign currency contracts and balances was $6.4 million for the fourth quarter of fiscal 2012, compared to $7.4 million in the prior-year's quarter.
The Company's effective tax rate was 30.9% for the fourth quarter of fiscal 2012, compared to 30.3% for the fourth quarter of the prior year.

The Company's expectations for the first quarter of fiscal 2013 ending April 28, 2012, are as follows:

- Consolidated net revenues are expected to range from $560 million to $575 million.
- Operating margin is expected to be between 6% and 6.5%.
- Diluted earnings per share are expected to be in the range of $0.25 to $0.28.

For the fiscal year ending February 2, 2013, the Company's expectations are as follows:
- Consolidated net revenues are expected to range from $2.74 billion to $2.78 billion.
- Operating margin is expected to be between 12.5% to 13.0%.
- Diluted earnings per share are expected to be in the range of $2.50 to $2.65.

The Company's fiscal year 2013 will include 53 weeks, while fiscal 2012 included 52 weeks.

The Company's outlook for fiscal 2013 assumes that currently prevailing exchange rates will continue throughout the year and also assumes increasing marketing and advertising investments. These assumptions would unfavorably impact the comparison to fiscal 2012 earnings between 35 and 40 cents per share.

Guess?, Inc. designs, markets, distributes and licenses a lifestyle collection of contemporary apparel, denim, handbags, watches, footwear and other related consumer products.

Guess? Inc

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