Guess? (GES) Tops Q3 EPS by 53c, Revenues Beat

Guess? (NYSE: GES) reported Q3 EPS of $0.58, $0.53 better than the analyst estimate of $0.05. Revenue for the quarter came in at $569 million versus the consensus estimate of $515.58 million.

• Q3 Fiscal 2021 Revenues Decreased 8% to $569 Million; Decreased 10% in Constant Currency, a Significant Improvement Versus the First Half of the Year
• Q3 Fiscal 2021 GAAP EPS of $0.41, Compared to $0.18 in Q3 Fiscal 2020; Q3 Fiscal 2021 Adjusted EPS of $0.58, Compared to $0.22 in Q3 Fiscal 2020
• Ended the Quarter with $365 Million in Cash and Cash Equivalents Versus $110 Million in the Prior-Year Quarter through Strategic Management of Working Capital and Investments

Carlos Alberini, Chief Executive Officer, commented, “We are very pleased with our third quarter performance, which significantly exceeded our expectations, in spite of the challenging circumstances we faced due to the pandemic. I am extremely proud of our teams around the world, which continue to excel in a difficult environment, demonstrating a relentless commitment to our customers and our Company, tremendous agility and exceptional execution. During the period, we have more than doubled our earnings per share versus last year, and significantly expanded our operating margin as our revenues decreased 7.6%. We managed the business well, drove more full price selling, increased product margins, reduced occupancy costs and leveraged expenses effectively. Our balance sheet is in great shape, with cash and equivalents of $365 million at quarter end and inventories 24% below last year’s levels.”

Mr. Alberini continued, “We are well positioned for the holiday period. While COVID-related restrictions are meaningfully impacting several markets, especially in Europe, we are confident in our brand, our product and our team’s ability to navigate the Company through these challenges.”

Mr. Alberini concluded, “We continue to work on transforming our business model and elevating our brand. During the period, we launched our first-ever global product line for all categories. This will enable us to represent the brand more consistently across the globe and benefit from significant efficiencies in developing our products. This is an incredible accomplishment that required vision, determination and tremendous teamwork. We also completed our Salesforce platform implementation and continue to work on other projects focused on customer centricity and organizational efficiencies. We have a clear vision for our Company and have a great team that is very excited about our future and is ready to take every challenge head on. I strongly believe we have a great model to continue to gain market share and grow profitably for many years to come.”

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 fourth quarter or the full fiscal year ending January 30, 2021. We expect revenues in the fourth quarter of fiscal 2021 to be down in the low to mid-twenties, impacted by lower customer traffic in stores related to the pandemic and temporary government-mandated store closures, especially in Europe and Canada, as well as permanent store closures. In addition, as a result of strategic product development changes, a smaller percentage of the European wholesale Spring/Summer collection will be shipped in the fourth quarter of this year versus last year with the remainder expected to ship mainly in the first quarter of next year.

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

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