Guess? Inc. Reports First Quarter Results
Total net revenue for the first quarter of fiscal 2013 decreased 2.2% to $579.3 million from $592.2 million in the prior-year quarter. In constant dollars, total net revenue increased slightly.
- The Company's retail stores in North America generated revenue of $251.8 million in the first quarter of fiscal 2013, a 1.8% increase from $247.5 million in the same period a year ago. Comparable store sales decreased 5.5% in U.S. dollars and 5.1% in local currency for the first quarter of fiscal 2013, compared to the same period a year ago. The Company directly operated 503 retail stores in the United States and Canada at the end of the first quarter of fiscal 2013 versus 484 stores a year earlier.
- Net revenue from the Company's Europe segment decreased 9.7% to $189.8 million in the first quarter of fiscal 2013, compared to$210.2 million in the prior-year period. In local currency, net revenue decreased 4.6%.
- Net revenue from the Company's Asia segment increased 7.9% to $64.8 million in the first quarter of fiscal 2013, from $60.1 million in the prior-year period.
- Net revenue from the Company's North American Wholesale segment decreased 3.8% to $43.9 million in the first quarter of fiscal 2013, from $45.6 million in the prior-year period.
- Licensing segment net revenue increased to $28.9 million in the first quarter of fiscal 2013, from $28.8 million in the prior-year period.
Operating earnings for the first quarter of fiscal 2013 declined 44.8% to $39.1 million (including a $0.9 million unfavorable currency translation impact) from $70.9 million in the prior-year period. Operating margin in the first quarter declined 520 basis points to 6.8%, compared to the prior-year quarter. The lower operating margin primarily reflects the impact of higher professional fees, higher selling and distribution expenses and increased investments in advertising and marketing, along with the impact of negative same stores sales on the Company's fixed cost structure. Product margins increased slightly compared to the prior-year quarter, reflecting markdown improvements in North American Retail, along with the greater mix of retail business in Asia. Other net income, which primarily relates to net unrealized revaluation gains on non-operating assets, partially offset by net unrealized mark-to-market losses on foreign currency contracts and balances, was $0.6 million for the first quarter of fiscal 2013. This compares to other net expense of $10.0 million for the first quarter of fiscal 2012.