Guess has reported financial results for its third quarter ended October 27, 2012 with decrease in consolidated revenues of 2 percent to 629 million dollars but up 1 percent in constant dollars. Its Asian revenues increased 16 percent, while North American retail revenues decreased 1 percent. European revenues increased 2 percent in local currency; declined 8 percent in US dollars. Operating earnings decreased 40 percent and operating margin declined 590 basis points to 9.2 percent.
For the third quarter of fiscal 2013, the Company generated net earnings of 36.6 million dollars, a 44.7 percent decrease compared to net earnings of 66.3 million dollars for the third quarter of fiscal 2012. Diluted earnings per share decreased 39.4 percent, to 0.43 dollars, compared to diluted earnings per share of 0.71 dollars for the prior-year quarter.
Paul Marciano, Chief Executive Officer, commented, “Third quarter earnings were consistent with our guidance but fell short of our operational goals, as economic pressures impacted consumer confidence in most of our markets. Our European business was stronger at the beginning of the quarter, though business softened toward the end of the period. We posted solid double digit growth in Asia. In North America, our key strategies remain relevant as we focus on driving traffic to the stores through enhanced customer engagement initiatives and elevating the brand with quality.”
Marciano added, “We do expect that the current market conditions in the global economy will continue for some time and we are more cautious on near term customer demand trends. We have a strong financial position and will run our business proactively to adapt to the existing economic climate, manage our expenses and inventories tightly and reallocate capital in growth regions of the world, specifically Eastern and Northern Europe as well as Asia. Our goal is to focus on delivering balanced returns to our shareholders, including through our dividend and share repurchase programs.”
Net earnings for the nine months ended October 27, 2012 were 106.2 million dollars, a decrease of 43.3 percent compared to adjusted net earnings of 187.2 million dollars for the nine months ended October 29, 2011. Diluted earnings per share declined 39.8 percent to 1.21dollars per share in the first nine months of the 2013 fiscal year compared to adjusted diluted earnings per share of 2.01 dollars in the comparable nine-month period last year. On a GAAP basis, for the first nine months of fiscal 2013, net earnings decreased 37.4 percent and diluted earnings per share decreased 33.5 percent.
The Company expects its fourth quarter of fiscal 2013 ending February 2, 2013consolidated net revenues in the range from 780 million dollars to 800 million dollars. The Company has updated its outlook for the fiscal year ending February 2, 2013 expecting consolidated net revenues to range from 2.62 billion dollars to 2.64 billion dollars.