Post Earnings Coverage as Guess' Quarterly Revenue Increased 3.2%

Upcoming AWS Coverage on Cherokee Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 28, 2017 / Active Wall St. announces its post-earnings coverage on Guess', Inc. (NYSE: GES). The Company announced its fourth quarter and fiscal 2017 financial results on March 15, 2017. The clothing Company missed market revenue and earnings estimates. Register with us now for your free membership at:

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One of Guess' competitors within the Apparel Stores space, Cherokee Inc. (NASDAQ: CHKE), is estimated to report earnings on April 13, 2017. AWS will be initiating a research report on Cherokee in the coming days.

Today, AWS is promoting its earnings coverage on GES; touching on CHKE. Get our free coverage by signing up to:

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Earnings Reviewed

Guess' total net revenue for Q4 FY17 increased 3.2% to $679.3 million compared to $658.3 million in the prior year's same quarter. On a constant currency basis, net revenue increased by 4.3%. The Company's revenue numbers fell short of analysts' consensus of $689 million. Guess' total net revenue for FY17 increased 0.2% to $2.21 billion compared to $2.20 billion in the prior year.

Guess' GAAP operating earnings for Q4 FY17 decreased 70.0% to $21.0 million from $70.0 million in the prior year's comparable period. GAAP operating margin in the reported quarter decreased 750 basis points to 3.1% from 10.6% in the prior year's corresponding quarter, driven primarily by higher asset impairment charges, more markdowns and the negative impact on the Company's fixed cost structure resulting from negative comparable store sales in Americas Retail.

For Q4 FY17, Guess' recorded GAAP net earnings of $6.6 million, or $0.08 per share, from $47.8 million, or $0.57 per diluted share, for Q4 FY16. For Q4 FY17, the Company recorded adjusted net earnings of $34.6 million, or $0.41 per diluted earnings share, compared to net earnings of $48.0 million, or $0.57 per diluted share, for the prior year's same quarter. The Company's earnings numbers lagged behind market estimates of $0.45 per share.

For FY17, Guess' recorded GAAP net earnings of $22.8 million, or $0.27 per diluted shares, compared to net earnings $81.9 million, or $0.96 per share, in the prior year. For the fiscal year ended January 28, 2017, the Company recorded adjusted net earnings of $37.2 million, or $0.44 per diluted share, compared to earnings of $83.4 million, or $0.98 per share, for the prior year.

Segment Results

During Q4 FY17, Guess' Americas Retail revenues decreased 6.4% in US dollars and 6.3% in constant currency. In the US and Canada, retail comp sales including ecommerce decreased 7.0% in US dollars and 7.4% in constant currency. Europe's revenues increased 11.4% in US dollars and 13.5% in constant currency. Asia's revenues increased 26.6% in US dollars and 27.9% in constant currency. Americas Wholesale revenues increased 1.0% in US dollars and 3.7% in constant currency in the reported quarter. Licensing revenues decreased 8.6% in US dollars and constant currency.

For Q4 FY17, Guess' operating margin for the Company's Americas Retail segment decreased to negative 11.1% in Q4 FY17 from 6.6% in the prior year's same period. Higher asset impairment charges recorded during Q4 FY17 negatively impacting the operating margin for the Company's Americas Retail segment by 11.4%. Operating margin for the Company's Europe segment increased 90 basis points to 16.0% in Q4 FY17 compared to 15.1% in the prior year's period, primarily due to higher gross margins. The higher gross margins were driven primarily by the favorable impact from higher initial mark-ups, partially offset by higher occupancy costs due to retail expansion.

Operating margin for the Company's Asia segment was flat at 3.5% in Q4 FY17 compared to the prior year's same period. Operating margin for the Company's Americas Wholesale segment decreased 200 basis points to 17.0% in Q4 FY17 from 19.0% in the prior year's corresponding period, driven by higher SG&A rate due primarily to timing of expenses. Operating margin for the Company's Licensing segment increased 30 basis points to 88.2% in Q4 FY17, compared to 87.9% in the prior year's same period.

Dividends

The Company's Board of Directors has approved a quarterly cash dividend of $0.225 per share on its common stock. The dividend will be payable on April 13, 2017, to shareholders of record at the close of business on March 29, 2017.

Outlook

For Q1 FY18, Guess' consolidated net revenues are expected to range between a decline of 0.5% and an increase of 1.5% in US dollars. Excluding the impact of currency, consolidated net revenues are expected to increase between 2.0% and 4.0% in constant currency. Operating margin is expected to be between minus 7.0% and minus 6.0% and includes roughly 30 basis points of currency headwind. Diluted net loss per share is expected to be in the range of $0.33 to $0.30.

For the fiscal year ending February 03, 2018, Guess' is forecasting consolidated net revenues to increase between 2.0% and 4.0% in US dollars. Currency headwinds are expected to negatively impact consolidated revenue growth by approximately 2.0%. Excluding the impact of currency, consolidated net revenues are expected to increase between 4.0% and 6.0% in constant currency. Operating margin is expected to be between 2.2% and 3.0% and includes roughly 40 basis points of currency headwind. Diluted earnings per share are expected to be in the range of $0.28 to $0.40.

Stock Performance

At the close of trading session on Monday, March 27, 2017, Guess' stock price marginally fell 0.82% to end the day at $10.82. A total volume of 1.68 million shares were exchanged during the session, which was above the 3-month average volume of 1.64 million shares. The Company's shares are trading at a PE ratio of 14.24 and have a dividend yield of 8.32%. At Monday's closing price, the stock's net capitalization stands at $914.51 million.

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SOURCE: Active Wall Street