Net earnings at apparel and footwear marketer, Guess, Inc plunged 41.3 per cent year on year for the third fiscal quarter ended November 1, 2014.
Guess said it recorded net earnings of $20.8 million in the third quarter of fiscal 2015, down 41.3 per cent from adjusted net earnings of $35.4 million for the third quarter of fiscal 2014.
Resultantly, diluted earnings per share too slipped 42.9 per cent to $0.24, compared to adjusted diluted earnings per share of $0.42 for the prior-year quarter.
Total net revenue for the third quarter of fiscal 2015 declined 3.9 per cent to $589.8 million as against $613.5 million in the prior-year quarter. In constant currency, revenue fell 2.6 per cent.
From overall revenue, North America generated sales of $243.2 million in the third quarter of fiscal 2015, a 4.2 per cent fall from $253.8 million in the same period a year ago.
Net revenue from its European segment decreased 5.5 per cent to $189.9 million in the reporting quarter from $200.9 million in the prior-year period. In local currency, sales slipped 2.5 per cent.
The Asia segment also posted a revenue reduction of 2.0 per cent from the year ago period to reach $71.3 million and in constant currency it went down by 5.1 per cent.
Licensing segment net revenue decreased 1.4 per cent to $32.0 million in the third quarter of fiscal 2015, from $32.4 million in the corresponding quarter of fiscal 2014.
Operating earnings was knocked down by 50.1 per cent to $24.9 million compared to adjusted operating earnings of $49.8 million in the same quarter of previous fiscal year.
In the same quarter, operating margin at Guess caved in by 390 basis points to 4.2 per cent as against adjusted operating margin of 8.1 per cent from the same quarter last fiscal year.
“The lower operating margin primarily reflects higher store impairment charges, from negative same store sales in North America and Europe, as well as more markdowns in North America,” Guess said.
The only redeeming feature was other net income which more than doubled to $7.5 million for the third quarter of fiscal 2015, compared to $3.6 million in the prior-year quarter.
Effective tax rate in the reporting quarter of the apparel marketer stood at 33.0 per cent, unchanged from third quarter of fiscal 2014.
Paul Marciano, CEO at Guess explained, “Third quarter results were within the range of our expectations from an operations perspective.”
“Going into the fourth quarter, overall trends in North America have softened from the previous quarter and in Europe, trends however have improved so far in the fourth quarter,” he added. (AR)
