Guess financial results in 2022 impacted by increased expenses

Guess has reported its financial results for its fourth and full fiscal year 2022, revealing a large hike in expenses due to losses from foreign currency exposures. 

Total net revenue for the fourth quarter, ending 29 January 2022, decreased 5% to £607 million, from £639 million in the same period in fiscal 2020. Compared to the fourth quarter results in fiscal 2021, total net revenue in Q4 2022 increased 23.4% from £492 million.

Adjusted net earnings in the fourth quarter of 2022 were £57 million, representing an 8.7% decrease compared to the fourth quarter of fiscal 2020 (£63 million) and a 3.2% decrease (£59 million) in Q4 of 2021.

Expenses in the fourth quarter in 2022 were £14 million, a large hike from the £1.4 million reported for the same quarter in 2020, due in large part to higher net realised and unrealised losses from foreign currency exposures.

Carlos Alberini, Chief Executive Officer, commented: “We are very pleased with our fourth quarter results. We delivered revenues in line with our expectations and exceeded our profit targets through strong gross margin performance and effective expense management.

"Our results this quarter cap an outstanding year for our Company, where the execution of our strategic initiatives helped to deliver much higher profitability, well in advance of our original plan. We closed the year with over $300 million in earnings from operations and reached an operating margin of 11.8%, more than double our pre-pandemic levels by both measures.

"We delivered a return on invested capital of 26% for the year, the highest it has been in ten years. Our balance sheet is strong, and we plan to use our capital opportunistically to return value to our shareholders through dividends and increased share repurchases.

For the full fiscal year 2022 total net revenue decreased 3.2% to £1.9 billion, down from £2 billion in fiscal 2020. However, when compared to 2021 net revenues, Guess saw an increase of 38.1%.

Net expenses in 2022 reflected the same hikes as in its fourth quarter, totalling £23 million, a sharp increase from £1.9 million in 2020.

The company predicts revenues for the full fiscal year 2023 to be in the "low single digits" against 2022, adding that this outlook assumes no meaningful disruptions from COVID-19 and reflects "significant disruptions in Russia."

Paul Marciano, Co-Founder and Chief Creative Officer, added, “This has been an incredible year for our Company where we completely transformed our business. Our brand elevation strategy is at the centre of that transformation. Today, the Guess brand enjoys strong momentum all over the world and the consistency of our assortments and brand images globally, the quality of our products and the perceived value of our offerings are among the best they have been in the history of Guess."

Guess also announced on 16 March, 2022 that it had appointed Dennis Secor as Interim Chief Financial Officer effective 1 April 2022. Secor previously served as Guess CFO from 2006 to 2012.