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Guess? Net Earnings Drop By Half
Guess? Inc. reported that its net earnings dropped 50.5 percent for the second quarter of fiscal 2015 and that it will be closing stores.
The pioneering Los Angeles lifestyle vertical retailer posted net earnings of $22 million during the second quarter of fiscal 2015. In the same quarter in the previous fiscal year, it reported $44.3 million in net earnings.
Guess reported other declines in its Aug. 27 announcement. Its North American same-store sales, which include e-commerce, declined 5 percent during the second quarter of its fiscal 2015. European revenues decreased 6 percent during the quarter. Asian revenues declined 2 percent.
Paul Marciano, the company’s chief executive officer, said Guess had predicted the performance and blamed a soft economy in North America for the declines.
During an Aug. 27 call with Wall Street analysts, Marciano said that Guess would close 50 stores before the end of the company’s fiscal year 2016. He also noted that 50 percent of the company’s North American store fleet will come up for renewal in the next three years. “[It] will give us flexibility to optimize our real estate portfolio,” he said. He also said that the company will streamline its cost structure by “realigning department and merging division structure. In total, we estimate that this will drive annualized savings at around $20 million a year or more.”
Guess forecast that its net revenues will range from $590 million to $600 million for the upcoming third quarter, which will end Nov. 1. Diluted earnings per share are expected to be in the range of $0.15 to $0.20.
