Guess? Inc (GES) Reports Mixed Q3 Fiscal 2024 Results; Trims Full-Year Outlook
Guess? Inc (NYSE:GES) reports a 3% increase in Q3 revenues, reaching $651 million.
GAAP EPS soared to $0.82, while Adjusted EPS climbed to $0.49.
Company lowers full-year fiscal 2024 outlook, citing geopolitical issues and wavering consumer confidence.
Quarterly dividend approved at $0.30 per share, payable on December 22, 2023.
On November 21, 2023, Guess? Inc (NYSE:GES) released its 8-K filing, announcing the financial results for its third quarter ended October 28, 2023. The company experienced a moderate revenue increase and a significant rise in GAAP EPS, attributed to discrete tax adjustments. However, Guess? Inc (NYSE:GES) has revised its full-year outlook downwards in light of the current global economic uncertainty.
Financial Performance Overview
Guess? Inc (NYSE:GES) reported a 3% revenue increase to $651 million compared to the same quarter last year, with a 1% rise in constant currency terms. The GAAP net earnings saw a substantial 155% increase to $55.7 million, largely due to a $31.2 million net positive impact from discrete tax adjustments related to business consolidation in Switzerland. This resulted in a GAAP EPS of $0.82, a 141% increase from the prior year's quarter. Adjusted net earnings also improved by 9% to $27.0 million, with adjusted EPS up by 11% to $0.49.
Segment Performance and Challenges
Performance varied across regions and segments. Europe revenues grew by 6% in U.S. dollars (5% in constant currency), while Americas Retail revenues declined by 7% in U.S. dollars (8% in constant currency). Americas Wholesale and Asia revenues saw modest increases, and Licensing revenues jumped by 19%. The mixed regional performance reflects the diverse challenges Guess? Inc (NYSE:GES) faces, including geopolitical tensions and fluctuating consumer confidence.
Operational Highlights and Adjusted Figures
GAAP earnings from operations remained flat at $54.8 million, with the operating margin slightly decreasing to 8.4%. Adjusted earnings from operations saw a marginal decrease to $57.9 million, with the adjusted operating margin also experiencing a slight dip to 8.9%. The company's cost management and strong licensing business helped mitigate some of the negative impacts from softer direct-to-consumer sales.
Outlook and Strategic Focus
CEO Carlos Alberini expressed confidence in the company's plans for the holiday season and its inventory position. However, due to the uncertain shopping environment, the company now expects a more conservative net revenue growth of 2% and an operating margin of around 9% for the fiscal year. Guess? Inc (NYSE:GES) is focusing on identifying growth opportunities and refining its strategy to deliver value to shareholders.
Dividends and Share Repurchases
The Board of Directors approved a quarterly cash dividend of $0.30 per share, underscoring the company's commitment to returning value to shareholders. In April 2023, Guess? Inc (NYSE:GES) repurchased approximately 2.2 million shares for $42.8 million as part of its 2021 Share Repurchase Program.
Investor Relations and Additional Information
Guess? Inc (NYSE:GES) will hold a conference call to discuss these results and provide additional insights into the company's performance and outlook. Investors and interested parties can access more details on the company's website under the "Investor Relations" section.
For a more detailed analysis of Guess? Inc (NYSE:GES)'s financials and outlook, investors are encouraged to review the full earnings report and listen to the conference call. As the company navigates through these uncertain times, it remains focused on strategic growth and operational efficiency to enhance shareholder value.
Explore the complete 8-K earnings release (here) from Guess? Inc for further details.
This article first appeared on GuruFocus.
