Guess Asia sales rise in second quarter
Guess Asia sales rose 17.5 per cent in the second quarter – and its operating margin improved in the region as well.
Reporting its results for the three months to July 29, CEO Victor Herrero said global revenues rose 5.3 per cent to US$573.7 million and operating profit by 49 per cent year-on-year, both figures at the high end of the company’s expectations.
“We continue to see the results of our efforts in Europe and Asia… mainly driven by new store openings, wholesale growth and positive comp sales. We are also encouraged by the trends in operating margins for these two regions, as they expanded in the quarter relative to last year.”
Operating margin for in Asia increased 870 basis points to 2.4 per cent in the second quarter of fiscal 2018, compared to negative 6.3 per cent in the prior-year quarter, as the US-based fashion retailer reduced expenses.
Herrero described the quarter as a “truly exciting time” for Guess.
“We have now increased revenues for four consecutive quarters and we expect consolidated revenues to continue to increase despite store closures in North America. In Europe and Asia we have seen not only strong double digits growth for several consecutive quarters but also continuing margin expansion. We have achieved meaningful cost reductions, especially in our supply chain.”
In the US, Guess is speeding up the culling of its store network, that market now representing less than 36 per cent of Guess’ global sales.
For the second quarter, Guess reported net earnings of $15.2 million, a 52.8 per cent decrease from $32.3 million for the same time last year, but those results included a one-off gain of $22.3 million, related to the sale of an investment.
Adjusted net earnings of $16.1 million, represented a 30.4 per cent increase on the $12.3 million of the same quarter last year.