Guess reported a 3.3 percent increase in third quarter net revenue on Tuesday, due to strong sales in both Europe and Asia, but still reported a net loss.
reported a net loss of $2.9 million in the quarter, compared to net earnings of $9.1 million for the third quarter of fiscal 2017. Adjusted earnings were $10.4 million, an 8.1 percent increase compared to $9.6 million for the third quarter of fiscal 2017.
Total net revenue for the third quarter ended October 28, 2017, increased to $554.1 million, compared to $536.3 million in the prior-year quarter. Revenue was bolstered by good momentum in Europe and Asia, where revenues were up 19 and 17 percent, respectively, mainly due to new store openings, wholesale growth and positive comp sales.
However, Guess’ Americas Retail and Wholesale revenues were still in the red, down 13.4 percent and 16.8 percent, though operating margins improved thanks to a profit improvement plan, according to CEO Victor Herrero, which included “tight markdown management, higher IMUs, negotiated rent reductions and unprofitable store closures.”
“Overall, as I peek into the future of our company, I believe that Europe and Asia still offer a lot of opportunity and should continue to grow double-digits next year,” added Herrero.
“I expect the profitability in the Americas to continue to benefit from our cost reduction and margin improvement initiatives. Finally, we remain committed to our long-term goal of 7.5 percent operating margin that we expect to achieve through revenue growth and disciplined cost control.”
Guess also issued its fourth quarter guidance and expects a consolidated net revenue increase between 10 and 12 percent, Full year consolidated net revenue is expected to increase between 6 and 6.5 percent,
As of October 28, 2017, the company directly operated 982 retail stores in the Americas, Europe and Asia.
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