Guess lowers outlook amid decline in Q2 earnings
Guess has released its financial results for the second quarter of fiscal year 2023, revealing a 2% increase in total net revenue to £542.3 million ($642.7 million).
For its second quarter fiscal 2023, Guess shared the following results:
- Total net revenue rose 12% in constant currency to £542.3 million ($642.7 million).
- GAAP net earnings decreased 39% to £45 million ($53.4 million).
- GAAP operating margin in the second quarter of fiscal 2023 decreased 5.6% to 8.3%, from 13.9% for the same prior-year quarter, driven primarily by higher markdowns, lower rent relief and government subsidies, unfavourable currency impact and higher store labor costs.
- Adjusted earnings from operations decreased 37% to £47 million ($55.7 million), from £74.7 million ($88.6 million) in the same prior-year quarter.
For its six months period results ending 30 July 2022, Guess shared the following results:
- Total net revenue increased 8% to $1.24 billion, from £970 billion ($1.15 billion) in the same prior-year period. In constant currency, net revenue increased by 16%.
- GAAP earnings from operations decreased 21% to £75.7 million ($89.8 million).
- GAAP operating margin decreased 2.6% to 7.3%, from 9.9% in the same prior-year period, driven primarily by the unfavourable currency impact, higher markdowns, higher store labor costs and lower rent relief, partially offset by overall leveraging of expenses.
- Adjusted earnings from operations decreased 15% to £82.2 million ($97.5 million).
Looking ahead, Guess expects revenues for the third quarter of fiscal 2023 to be down around 4.5% in US dollars (up 4.5% in constant currency) versus the third quarter of fiscal 2022. For the full fiscal year 2023, the company expect revenues to be up around 1.5% in US dollars (9.5% in constant currency) versus fiscal 2022.
Carlos Alberini, Chief Executive Officer said: “For the second half of the year, we have adjusted our outlook to reflect our current trends and the impact of existing macro-economic headwinds, including currency. We have a strong team and we continue to manage our business with discipline, focusing on what we can control. We remain confident in our long term opportunities to grow and leverage the power of our highly diversified business model and our strong brand momentum.”