Guess revenues tumble more than 40%
Los Angeles-based fashion retailer Guess?, Inc. announced a 41.7% drop in its second-quarter net revenue on Wednesday, as the Covid-19 pandemic continued to have a significant negative impact on its operations.
For the second quarter ended August 1, 2020, the company reported net revenues of $398.5 million, down from $683.2 million in the prior-year period. In constant currencies, the decrease in revenues was 41.2%.
Declines were fairly consistent across Guess’ different distribution channels, with retail revenues in the Americas falling 44.7%, while wholesale revenues in the region decreased 51.6%. The company’s revenues in Europe and Asia fell 39.5% and 39.7%, respectively, while licensing revenues decreased 34.5%.
Guess stores, which closed in March due to the health crisis, began reopening in the second quarter. On average, the company's brick-and-mortar locations, 95% of which have now reopened, were closed for about 30% of Q2.
The retailer currently boasts 1,084 directly operated stores around the world, with a further 538 locations being operated by partners and distributors.
Quarterly net loss at Guess totaled $20.4 million, or $0.31 per diluted share, compared to earnings of $25.3 million, or $0.35 per diluted share, in the same period in the previous year.
“The Covid-19 crisis continued to impact our business in the second quarter,” commented Guess CEO Carlos Alberini in a release. “We remained focused on managing what was in our control including reducing costs and optimizing inventory management and the use of capital. I believe that our efforts paid off, as we minimized our losses in spite of a 42% decrease in our revenues.”
In the first half of the fiscal year, Guess recorded net revenue of $658.8 million, a decrease of 46.0%, or 45.1% in constant currencies, compared to the $1.22 billion reported by the company in the same six-month period in the previous year.
In the Americas, retail revenues fell 50.8%, while wholesale revenues decreased 47.6%. Revenues also fell 43.3% in Europe and 46.2% in Asia. Licensing revenues declined 32.9%.
First-half net loss was $178.0 million, or $2.72 per diluted share, compared to net earnings of $3.9 million, or $0.05 per diluted share, in the prior-year period.
Due to the ongoing uncertainty surrounding the evolution of the Covid-19 pandemic, Guess has not provided financial outlook for the third quarter or full fiscal year 2021.
Nonetheless, Alberini struck an optimistic chord when discussing the company’s future. “We are well positioned for the second half of the year. I am very excited about our product offering and our marketing plan for the Holiday season,” he said.
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