Guess Q1 loss widens, revenues drop 51.5 percent
10 Jun 2020
Guess?, Inc. reported first quarter GAAP net loss of 157.7 million dollars, compared to 21.4 million dollars for the first quarter of fiscal 2020, while GAAP diluted loss per share was 2.40 dollars compared to 27 cents for the same prior-year quarter. For the first quarter, the company recorded adjusted net loss of 118.9 million dollars compared to 19.6 million dollars for the first quarter of fiscal 2020, while adjusted diluted loss per share was 1.81 dollars, compared to 25 cents for the same prior-year quarter. Total net revenue for the quarter decreased 51.5 percent to 260.3 million dollars, while in constant currency, net revenue decreased by 50.1 percent.
Commenting on the first quarter trading, Carlos Alberini, the company’s Chief Executive Officer, said in a statement: “The Covid-19 crisis has had a material impact on our company, including our operations and our financial results. To minimize our loss and protect our liquidity, we challenged every aspect of our business, which was being significantly impacted by extensive store closures and lower customer demand. In addition to postponing our decision related to the payment of the quarterly dividend, we were able to reduce expenses, adjust inventory levels and purchases, lower capital expenditures and extend vendor payment terms to react to the crisis.”
Guess expects negative impact of Covid-19 to continue in 2021
The company said, Americas retail revenues decreased 57.7 percent in U.S. dollars and 57.4 percent in constant currency, while Americas wholesale revenues decreased 44 percent in U.S. dollars and 41.8 percent in constant currency. Revenues in Europe decreased 49.3 percent in U.S. dollars and 47.4 percent in constant currency, while Asia revenues decreased 52.6 percent in U.S. dollars and 50.6 percent in constant currency and licensing revenues for the quarter decreased 31.3 percent in U.S. dollars.
Guess expects that the global crisis will continue to have a material impact on its consolidated financial position, consolidated results of operations, and consolidated cash flows in fiscal 2021. Based on the sales data for the brick-and-mortar stores that have re-opened since May 2, 2020, the company added that it experienced sales productivity for reopened stores of roughly 75 percent in the U.S. and Canada and 70 percent in Europe as compared to last year’s level. The company currently expect revenues for the second quarter of fiscal 2021 to have a decrease similar to that of the first quarter.
Guess further said that the board of directors has decided to continue to postpone its decision to pay the quarterly cash dividend at this time in order to preserve the company’s cash position and provide continued financial flexibility in light of the uncertainties related to the Covid-19 pandemic.