Guess, Inc. Earnings Cheat Sheet: Streak of Four Straight Quarters of Shrinking Margins Broken, but Profit Drops

Rising costs hurt Guess, Inc. (NYSE:GES) in the second quarter as profit dropped from a year earlier. Guess Inc designs, markets, distribute and licenses a leading lifestyle collection of contemporary apparel and accessories for men, women and children that reflect the American lifestyle and European fashion sensibilities.

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Guess Earnings Cheat Sheet for the Second Quarter

Results: Net income for Guess, Inc. fell to $60.7 million (65 cents per share) vs. $66.8 million (72 cents per share) a year earlier. This is a decline of 9.1% from the year earlier quarter.

Revenue: Rose 17.3% to $677.2 million from the year earlier quarter.

Actual vs. Wall St. Expectations: GES reported adjusted net income of 84 cents per share. By that measure, the company beat the mean estimate of 81 cents per share. It beat the average revenue estimate of $656.4 million.

Quoting Management: Paul Marciano, Chief Executive Officer, commented, “We are pleased with our financial performance in the second quarter. Our adjusted earnings exceeded our expectations for the quarter and we delivered record revenues, with growth in all regions of the world. Our international businesses continue to drive our growth, with Europe and Asia combining to deliver 80% of this quarter’s revenue increase. In North America, our focus on inventory control and markdown management was evident in our results, as we posted a substantial increase in our retail profitability. Overall, our results demonstrate the ability of our team to manage our business effectively and execute well on our strategic initiatives.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 11 cents in the first quarter, by 5 cents in the fourth quarter of the last fiscal year, and by 16 cents in the third quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 9.8% to $592.2 million in the first quarter. The figure rose 17.9% in the fourth quarter of the last fiscal year from the year earlier and climbed 17.4% in the third quarter of the last fiscal year from the year-ago quarter.

The company has now seen net income fall in each of the last two quarters. In the first quarter, net income fell 15.2% from the year earlier quarter.

Competitors to Watch: Liz Claiborne, Inc. (NYSE:LIZ), The Wet Seal, Inc. (NASDAQ:WTSLA), Express, Inc. (NYSE:EXPR), Destination Maternity Corp. (NASDAQ:DEST), The Cato Corporation (NYSE:CATO), bebe stores, inc. (NASDAQ:BEBE), Cache, Inc. (NASDAQ:CACH), Carter’s, Inc. (NYSE:CRI), The Talbots, Inc. (NYSE:TLB), and Ascena Retail Group Inc (NASDAQ:ASNA).

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(Source: Xignite Financials)

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