Guess reveals Q3 revenue drop in "challenging retail environment"
Guess has reported a 2% decrease in revenue to £531 million ($633.4 million) for the third quarter ending 29 October 2022. In constant currency, revenue increased 10%.
In Europe, revenue decreased 2% in US dollars and increased 17% in constant currency. Retail sales, including e-commerce, decreased 8% in US dollars and increased 9% in constant currency.
Adjusted earnings from operations decreased 18% to £48 million ($58 million). Adjusted operating margin decreased 1.8% to 9.1%, driven by unfavorable impact of currency, higher costs and markdowns, partially offset by leveraging of expenses.
Total revenue for the nine months ending 29 October 2022 increased 4% to £1.56 billion ($1.87 billion). In constant currency, revenue increased 14%.
In Europe, revenue increased 5% in US dollars and 21% in constant currency for the nine months. Retail sales decreased 6% in US dollars and increased 8% in constant currency.
Adjusted earnings from operations decreased 16% to £130.3 million ($155.4 million). Adjusted operating margin decreased 2% to 8.3%, due to unfavourable currency impact, higher markdowns, higher costs and lower rent relief, partially offset by overall leveraging of expenses.
For the fourth quarter of fiscal 2023, the company expects revenue to be down around 3.5% in US dollars and up 3.5% in constant currency. For the full fiscal 2023, it expects revenue to increase 2% in US dollars and 10.5% in constant currency.
Carlos Alberini, CEO of Guess, said: “We are pleased with our third quarter financial results, which exceeded our revenue and operating profit expectations in a challenging retail environment. Our revenues decreased by almost 2% in US dollars but grew 10% in constant currency, driven primarily by the strength of our business in Europe."
Paul Marciano, Co-Founder and Chief Creative Officer, added: “Our focus remains on delivering great product to support our customers’ lifestyles with one global product line for our multiple categories of apparel and accessories. Through our focus on brand elevation, we have improved the quality and styling of our products. I am very pleased with how our teams continue to work well together to leverage our strong brand momentum and gain market share.”