Sales, profit soar for Guess in Asia
Guess has returned to profit in the first half of this year, with high rate of growth in Asia-Pacific a key factor.
Sales by Guess in Asia rose by 32.3 per cent during the first half of this year, expressed in US dollars, and by 27.1 per cent in constant currency, with same-store sales up by 20 per cent.
That was more than double the sales growth of the company overall.
For the full year, Guess is predicting comp sales in Asia to be up by the low teens in percentage terms, with profit up in the low- to mid-20 per cent region.
The company is performing across all markets, even in its core US home market where it has been struggling in recent times.
Globally, for the six months to August 4, Guess achieved net sales of US$1.17 billion, up 14.1 per cent. Net earnings were $11.6 million, compared to an adjusted net loss of $3.3 million for the same period last year.
“Overall, I am very pleased by the momentum we are experiencing across the globe,” said CEO Victor Herrero in the company’s earnings statement.
“We are now planning for positive comps in all regions, including the Americas. Looking forward, I feel confident that the ‘turnaround’ has only just begun, as we are well positioned to exit this fiscal year with every business segment profitable and the company firmly on the path to our 7.5 per cent operating margin goal by continuing to execute on our strategic initiatives,” he said.
Operating margin for the Guess in Asia rose by 120 basis points over the first half to 3.4 per cent, from 2.2 per cent a year ago. The company said the improvement was driven by reduced occupancy costs, partially offset by higher expenses resulting from retail expansion in Australia.
The company said a lower number of markdowns in the US also helped reverse its loss.