Guess has lowered its full-year outlook after noticing weak consumer sentiment and lower traffic in the North America and Asia markets during the third quarter.
The company reported a 13 per cent revenue growth for the quarter ended November 2, which was mainly driven by its acquisition of Rag & Bone earlier this year. Excluding the acquisition, the core Guess business only achieved “modest improvement”.
By region, Americas retail revenues increased 12 per cent, while comparable sales were down 14 per cent. Europe revenues rose 7 per cent with comparables up 8 per cent. Asia revenue grew 2 per cent, but comparable sales slid 17 per cent.
“All of our operating segments posted revenue growth, except for our Licensing segment, which was impacted by the internalization of our outerwear business and delivered flat revenues,” said CEO Carlos Alberini.
“Our business in Europe was strong while North America and Asia experienced a more challenging environment impacted by slow customer traffic into our direct-to-consumer channels,” Alberini added.
On the bottom line, the company swung to a GAAP net loss of $23.4 million from last year’s net earnings of $55.7 million. Adjusted net earnings were $17.7 million, representing a 35 per cent decrease year-on-year.
Guess has lowered its outlook for the full year, expecting revenue to grow between 2.2 per cent and 5.4 per cent, compared to the prior range of 7.1 to 8.1 per cent.
“We believe that the current consumer sentiment and slow customer traffic in North America and Asia will persist during the fourth quarter, impacting our business negatively,” explained Alberini.
