Guess Asia sales rise 17 per cent

Guess Asia sales rose 16.9 per cent in the first quarter of the new financial year – but the company still made a loss in the region.

While Guess did not break down the markets within Asia it said sales rose 15.5 per cent on a constant-currency basis. Same-store sales including e-commerce rose by 4 per cent in US dollars and 2 per cent in constant currency.

But the Guess Asia business operating margin dropped from negative 1 per cent to negative 1.3 per cent in the quarter after unspecified impairments. Excluding those from the figures, the operating margin improved by 0.6 per cent, driven by reducing expenses.

Guess is ‘still sexy’

CEO Victor Herrero gave a hint to the company’s strategy moving forward, saying that in today’s world, it is crucial to stay connected with customers and their aspirations.

“The Guess brand has always been associated with ‘sexy’, and sexy is being more broadly interpreted where anyone can be sexy. Authenticity is ‘in’, and being real is more important than being perfect. The millennial and Gen Z consumer is seeking purpose-driven brands whose values align with their own. As always, we are adapting to this changing environment.”

Worldwide, Guess lost $21.3 million, which was a 15.4 per cent improvement on the same quarter last year. Sales rose 2.2 per cent to $458.6 million, or by 4 per cent on a constant-currency basis.

Retail sales slumped 14.9 per cent in the Americas, but European revenues increased 23.3 per cent due to store network expansion.

American wholesale revenues increased 5.7 per cent and licensing revenue decreased 9.3 per cent.

Herrero said first-quarter results finished above the high-end of the company’s sales expectations and adjusted operating margin.

“We continued to see strong performance in our international businesses. In Europe and in Asia, our revenues were up… driven by new store openings and positive comp sales. We are also encouraged by the trends in adjusted operating margins for these two regions, as they expanded in the quarter relative to last year,” he said.

“In the Americas, as the performance of our business and the environment remain soft, we are more than ever focused on shrinking our footprint and profitability improvements.”

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