Guess? (GES) Tops Q2 EPS by 56c, Revenues Beat

Guess? (NYSE: GES) reported Q2 EPS of ($0.01), $0.56 better than the analyst estimate of ($0.57). Revenue for the quarter came in at $398.54 million versus the consensus estimate of $384.82 million.

• Resumed its Quarterly Cash Dividend Program, Declaring a Cash Dividend of $0.1125 per Share on the Company’s Common Stock
• Continued to Tightly Manage Costs and Inventory Position to Mitigate the Impact of the COVID-19 Crisis
• Q2 Fiscal 2021 Revenues Decreased 42% to $399 Million; Decreased 41% in Constant Currency Driven by COVID-19 Related Store Closures and Lower Demand
• Q2 Fiscal 2021 GAAP Loss per Share of $0.31, Compared to GAAP EPS of $0.35 in Q2 Fiscal 2020; Q2 Fiscal 2021 Adjusted Loss per Share of $0.01, Compared to Adjusted

Carlos Alberini, Chief Executive Officer, commented, “The COVID-19 crisis continued to impact our business in the second quarter. We remained focused on managing what was in our control including reducing costs and optimizing inventory management and the use of capital. I believe that our efforts paid off, as we minimized our losses in spite of a 42% decrease in our revenues. We increased product margins, ended the period with inventories down 13% compared to last year and finished the quarter with a strong balance sheet and ample liquidity. I am proud to say that our teams around the world rose to the challenges imposed by the crisis in an extraordinary way and the results we achieved demonstrate their strong leadership, relentless hard work and amazing dedication to our customers and our Company.”

Mr. Alberini continued, “We are well positioned for the second half of the year. I am very excited about our product offering and our marketing plan for the Holiday season. I strongly believe our customers will see a significant elevation of the Guess brand this season and into the future.”

Mr. Alberini concluded, “Overall, the crisis inspired our team to think differently, to challenge every aspect of the business and to architect a simpler, more efficient, capital-light and flexible model. We are building a business that will be better positioned to compete in the future and gain market share globally. We have an incredible brand with a true global reach and presence in more than 100 countries. I believe that companies that adapt their business models to actively embrace new consumer preferences placing the customer at the center of everything they do will gain share and overcome the crisis faster. We fully expect to be one of those companies. We have a strong team which is even more excited about our future today than I have seen it since I came back to Guess.”

Outlook

Given the current circumstances regarding the COVID-19 crisis and its uncertain impact on our operations, we are not providing detailed guidance for the third quarter ending October 31, 2020 or the full fiscal year ending January 30, 2021. Based on current trends, we expect revenues for the third and fourth quarters of fiscal 2021 to decrease in the mid-teens range.

Dividend and Share Repurchases

The Company’s Board of Directors has approved the resumption of its quarterly cash dividend program, declaring a cash dividend of $0.1125 per share on the Company’s common stock. The Board also decided not to declare any cash dividends for the prior two quarters. The dividend will be payable on October 2, 2020 to shareholders of record as of the close of business on September 16, 2020. In addition, during the second quarter of fiscal 2021, the Company invested approximately $39 million to repurchase four million shares of its common stock to return value to its shareholders.

For earnings history and earnings-related data on Guess? (GES) click here.

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