Guess narrows losses in first quarter, revenues lift 14% on Asia earning
In this article (5)
Continued momentum in Asia has helped boost revenues for US clothing brand Guess Inc for its first quarter, to May 5.
As the company continued to take advantage of its infrastructure investments in China and Japan, its operating margin in Asia improved by 430 basis points.
Asia revenues increased 32.6 per cent in US dollars and 25.1 per cent in constant currency.
Operating margin for the company’s Asia segment increased 430 basis points to 4.8 per cent in the quarter, compared to 0.5 per cent. This was driven mainly by higher gross margins.
CEO Victor Herrero says company revenues overall grew 15 per cent in US dollars and 8 per cent in constant currency. “We were also able to expand the company’s operating margin, despite cost pressures related to our transition to our new distribution centre in Europe.”
At the same time, the company had a GAAP net loss of $21.2 million, a 0.3 per cent improvement on the first quarter a year earlier. An adjusted net loss of $17.8 million was 7.9 per cent better than the same period 12 months ago.
Questions & Answers
Q.What was the main reason for the improvement in operating margin for Guess's Asia segment?
What was the main reason for the improvement in operating margin for Guess's Asia segment?
The primary driver behind the 430 basis point increase in the operating margin for the Asia segment was higher gross margins. This contributed to the segment reaching 4.8 per cent compared to 0.5 per cent previously.
Q.By how much did Guess's total revenues increase in US dollars during the first quarter?
By how much did Guess's total revenues increase in US dollars during the first quarter?
Overall company revenues grew by 15 per cent in US dollars during the first quarter. This figure was 8 per cent when measured in constant currency, as stated by CEO Victor Herrero.
Q.Despite cost pressures, did the company manage to improve its overall operating margin?
Despite cost pressures, did the company manage to improve its overall operating margin?
Yes, the company was able to expand its overall operating margin, even with cost pressures. These pressures were related to the transition to its new distribution centre located in Europe.
Q.What was the GAAP net loss reported by Guess for the first quarter?
What was the GAAP net loss reported by Guess for the first quarter?
Guess reported a GAAP net loss of $21.2 million for the first quarter. This represented a 0.3 per cent improvement compared to the same period in the previous year.
Reader pulse
Is Guess's Asia performance sustainable?
22,596 votes so far