<\/p>\n
Guess?, Inc. Reports Fiscal Year 2022 Second Quarter Results<\/span><\/b><\/p>\n Q2 Fiscal 2022 Revenues Reached $629 Million, Up 58% Compared to Q2 Fiscal 2021, Down 8% Compared to Q2 Fiscal 2020 <\/span><\/b><\/p>\n More than Doubled Operating Margin Versus the Pre-Pandemic Levels to Reach 13.9%<\/span><\/b><\/p>\n Q2 Earnings Per Share Increased by Over 2.5x Compared to Pre-Pandemic Levels to Finish at $0.91<\/span><\/b><\/p>\n Raising Full-Year Outlook for Operating Margin to 10.0%; Increasing Long-Term Operating Margin Goal to 12% and Adjusted Earnings Per Share to $3.50 by Fiscal 2024<\/span><\/b><\/p>\n Increases Share Repurchase Authorization to $200 Million<\/span><\/b><\/p>\n LOS ANGELES–(BUSINESS WIRE<\/a>)– \nCarlos Alberini, Chief Executive Officer, commented, \u201cWe are very pleased with our performance this quarter, which significantly exceeded our earnings expectations. Compared to the second quarter of fiscal 2020, the LLY period, we expanded operating margin by over 700 basis points to 13.9%. Our revenues for the quarter finished down 8% versus LLY. The entire decline was due to a timing shift of European wholesale shipments into the third quarter and the impact of permanent store closures. We achieved this result in spite of the pandemic and being significantly less promotional in all of our direct-to-consumer businesses. Our operating profit growth was strong, up 90% to LLY. This resulted in earnings per share of $0.91, versus $0.35 in the LLY period.\u201d\n<\/p>\n \nPaul Marciano, Co-Founder and Chief Creative Officer, added, \u201cDuring the quarter we made great progress on our brand elevation strategy. This is a very ambitious project that touches almost every aspect of our business. The work that our teams have put into this has been extraordinary, and I want to thank them for their great contributions to this key initiative for our Company and our future.\u201d\n<\/p>\n \nMr. Alberini concluded, \u201cBased on our progress, we now expect to deliver our 10% operating margin goal in the current year and are raising our expectations to reach 12% by fiscal year 2024, which would yield a return on invested capital of over 30% and adjusted earnings per share of around $3.50. The Guess brand has significant white space for revenue growth, and we are confident in our ability to reach our $2.8 billion revenue target by fiscal 2024. We continue to prioritize returning value to our shareholders and announced today that our Board has approved an increase of our existing share buyback program to $200 million. Overall, I could not be more excited about our future.\u201d\n<\/p>\n Adjusted Amounts<\/span><\/b><\/p>\n \nThis press release contains certain non-GAAP, or adjusted, financial measures. References to \u201cadjusted\u201d results exclude the impact of (i) asset impairment charges, (ii) net gains on lease modifications, (iii) certain professional service and legal fees and related (credits) costs, (iv) certain separation charges, (v) non-cash debt discount amortization on our convertible senior notes, (vi) the related income tax effects of the foregoing items, as well as the impact from changes in the income tax law on deferred income taxes in certain tax jurisdictions, net income tax settlements and adjustments to specific uncertain income tax positions, and (vii) certain discrete income tax adjustments, in each case where applicable. A reconciliation of reported GAAP results to comparable non-GAAP results is provided in the accompanying tables and discussed under the heading \u201cPresentation of Non-GAAP Information\u201d below.\n<\/p>\n Second Quarter Fiscal 2022 Results Compared to Second Quarter Fiscal 2020<\/span><\/b><\/p>\n \nFor the second quarter of fiscal 2022, the Company recorded GAAP net earnings of $61.1 million, a 141.1% increase from $25.3 million for the second quarter of fiscal 2020. GAAP diluted EPS increased 160.0% to $0.91 for the second quarter of fiscal 2022, compared to $0.35 for the second quarter of fiscal 2020. The Company estimates a positive impact from its share buybacks of $0.11 and a minimal impact from currency on GAAP diluted EPS in the second quarter of fiscal 2022 when compared to the second quarter of fiscal 2020.\n<\/p>\n \nFor the second quarter of fiscal 2022, the Company\u2019s adjusted net earnings were $64.1 million, a 133.7% increase from $27.4 million for the second quarter of fiscal 2020. Adjusted diluted EPS increased 152.6% to $0.96, compared to $0.38 for the second quarter of fiscal 2020. The Company estimates its share buybacks had a positive impact of $0.13 and currency had a minimal impact on adjusted diluted EPS in the second quarter of fiscal 2022 when compared to the second quarter of fiscal 2020.\n<\/p>\n Net Revenue. <\/i><\/b>Total net revenue for the second quarter of fiscal 2022 decreased 8.0% to $628.6 million, from $683.2 million in the second quarter of fiscal 2020. In constant currency, net revenue decreased by 10.8%.\n<\/p>\n Earnings from Operations. <\/i><\/b>GAAP earnings from operations for the second quarter of fiscal 2022 increased 90.0% to $87.4 million (including $0.4 million net gains on lease modifications, $1.5 million in non-cash impairment charges taken on certain long-lived store related assets and a $0.3 million favorable currency translation impact), from $46.0 million (including $1.5 million in non-cash impairment charges taken on certain long-lived store related assets) in the second quarter of fiscal 2020. GAAP operating margin in the second quarter of fiscal 2022 increased 7.2% to 13.9%, from 6.7% in the second quarter of fiscal 2020, driven primarily by lower markdowns, lower occupancy costs and higher initial markups. The negative impact of currency on operating margin for the quarter was approximately 30 basis points.\n<\/p>\n \nFor the second quarter of fiscal 2022, adjusted earnings from operations increased 84.9% to $88.6 million, from $47.9 million in the second quarter of fiscal 2020. Adjusted operating margin increased 7.1% to 14.1%, from 7.0% in the second quarter of fiscal 2020, driven primarily by lower markdowns, lower occupancy costs and higher initial markups.\n<\/p>\n Second Quarter Fiscal 2022 Results Compared to Second Quarter Fiscal 2021<\/span><\/b><\/p>\n \nFor the second quarter of fiscal 2022, the Company recorded GAAP net earnings of $61.1 million, as compared to a GAAP net loss of $20.4 million for the second quarter of fiscal 2021. GAAP diluted EPS increased to $0.91 for the second quarter of fiscal 2022, compared to a GAAP diluted loss per share of $0.31 for the same prior-year quarter. The Company estimates a positive impact from its share buybacks and currency of $0.03 and $0.01, respectively, on GAAP diluted EPS in the second quarter of fiscal 2022 when compared to the prior-year quarter.\n<\/p>\n \nFor the second quarter of fiscal 2022, the Company\u2019s adjusted net earnings were $64.1 million, as compared to the Company\u2019s adjusted net loss of $0.6 million for the second quarter of fiscal 2021. Adjusted diluted EPS increased to $0.96, compared to adjusted diluted loss per share of $0.01 for the same prior-year quarter. The Company estimates its share buybacks had a positive impact of $0.03 and currency had a minimal impact on adjusted diluted EPS in the second quarter of fiscal 2022 when compared to the prior-year quarter.\n<\/p>\n Net Revenue. <\/i><\/b>Total net revenue for the second quarter of fiscal 2022 increased 57.7% to $628.6 million, from $398.5 million in the same prior-year quarter. In constant currency, net revenue increased by 51.1%.\n<\/p>\n Earnings (Loss) from Operations. <\/i><\/b>GAAP earnings from operations for the second quarter of fiscal 2022 increased to $87.4 million (including $0.4 million net gains on lease modifications, $1.5 million in non-cash impairment charges taken on certain long-lived store related assets and a $2.3 million favorable currency translation impact), from a GAAP loss from operations of $14.3 million (including $0.9 million net gains on lease modifications and $12.0 million in non-cash impairment charges taken on certain long-lived store related assets) in the same prior-year quarter. GAAP operating margin in the second quarter of fiscal 2022 increased 17.5% to 13.9%, from negative 3.6% in the same prior-year quarter, driven primarily by overall leveraging of expenses. The positive impact of currency on operating margin for the quarter was approximately 30 basis points.\n<\/p>\n \nFor the second quarter of fiscal 2022, adjusted earnings from operations increased to $88.6 million, from an adjusted operating loss of $0.9 million in the same prior-year quarter. Adjusted operating margin increased 14.3% to 14.1%, from negative 0.2% in the same prior-year quarter, driven primarily by overall leveraging of expenses.\n<\/p>\n Six-Month Period Fiscal 2022 Results Compared to Six-Month Period Fiscal 2020<\/span><\/b><\/p>\n \nFor the six months ended July 31, 2021, the Company recorded GAAP net earnings of $73.1 million, compared to $3.9 million for the six months ended August 3, 2019. GAAP diluted EPS was $1.10 for the six months ended July 31, 2021, compared to $0.05 for the six months ended August 3, 2019. The Company estimates a net positive impact from its share buybacks and its prior year convertible notes transaction of $0.16 and a negative currency impact of $0.06 on GAAP diluted EPS for the six months ended July 31, 2021 when compared to the six months ended August 3, 2019.\n<\/p>\n \nFor the six months ended July 31, 2021, the Company recorded adjusted net earnings of $78.0 million, compared to $7.8 million for the six months ended August 3, 2019. Adjusted diluted EPS was $1.17, compared to $0.10 for the six months ended August 3, 2019. The Company estimates its share buybacks and its prior year convertible notes transaction had a net positive impact of $0.20 and currency had a negative impact of $0.06 on adjusted diluted EPS during the six months ended July 31, 2021 when compared to the six months ended August 3, 2019.\n<\/p>\n Net Revenue. <\/i><\/b>Total net revenue for the first six months of fiscal 2022 decreased 5.8% to $1.15 billion, from $1.22 billion for the six months ended August 3, 2019. In constant currency, net revenue decreased by 8.3%.\n<\/p>\n Earnings from Operations. <\/i><\/b>GAAP earnings from operations for the first six months of fiscal 2022 was $114.0 million (including $2.6 million net gains on lease modifications, $1.9 million in non-cash impairment charges taken on certain long-lived store related assets and a $1.9 million unfavorable currency translation impact), compared to $21.5 million (including $3.3 million in non-cash impairment charges taken on certain long-lived store related assets) for the six months ended August 3, 2019. GAAP operating margin for the first six months of fiscal 2022 increased 8.1% to 9.9%, from 1.8% for the six months ended August 3, 2019, driven primarily by lower occupancy costs, higher initial markups and lower markdowns. The negative impact of currency on operating margin for the first six months of fiscal 2020 was approximately 50 basis points.\n<\/p>\n \nFor the six months ended July 31, 2021, adjusted earnings from operations was $114.5 million, compared to $25.5 million for the six months ended August 3, 2019. Adjusted operating margin improved 7.9% to 10.0% for the six months ended July 31, 2021, from 2.1% for the six months ended August 3, 2019, driven primarily by lower occupancy costs, higher initial markups and lower markdowns.\n<\/p>\n Six-Month Period Fiscal 2022 Results Compared to Six-Month Period Fiscal 2021<\/span><\/b><\/p>\n \nFor the six months ended July 31, 2021, the Company recorded GAAP net earnings of $73.1 million, compared to GAAP net loss of $178.0 million for the six months ended August 1, 2020. GAAP diluted EPS was $1.10 for the six months ended July 31, 2021, compared to GAAP diluted loss per share of $2.72 during the same prior-year period. The Company estimates a net positive impact from its share buybacks and its prior year convertible notes transaction and currency of $0.05 and $0.10, respectively, on GAAP diluted EPS for the six months ended July 31, 2021 when compared to the same prior-year period.\n<\/p>\n \nFor the six months ended July 31, 2021, the Company recorded adjusted net earnings of $78.0 million, compared to an adjusted net loss of $119.6 million for the six months ended August 1, 2020. Adjusted diluted EPS was $1.17, compared to adjusted loss per share of $1.83 during the same prior-year period. The Company estimates its share buybacks and its prior year convertible notes transaction and currency had a net positive impact of $0.05 and $0.09, respectively, on adjusted diluted EPS during the six months ended July 31, 2021 when compared to the same prior-year period.\n<\/p>\n Net Revenue. <\/i><\/b>Total net revenue for the first six months of fiscal 2022 increased 74.4% to $1.15 billion, from $658.8 million in the same prior-year period. In constant currency, net revenue increased by 66.6%.\n<\/p>\n Earnings (Loss) from Operations. <\/i><\/b>GAAP earnings from operations for the first six months of fiscal 2022 was $114.0 million (including $2.6 million net gains on lease modifications, $1.9 million in non-cash impairment charges taken on certain long-lived store related assets and a $1.6 million favorable currency translation impact), compared to GAAP loss from operations of $176.8 million (including $0.4 million net gains on lease modifications and $64.9 million in non-cash impairment charges taken on certain long-lived store related assets) in the same prior-year period. GAAP operating margin in fiscal 2022 increased 36.7% to 9.9%, from negative 26.8% in the same prior-year period, driven primarily by overall leveraging of expenses. The impact of currency on operating margin was minimal for the six months ended July 31, 2021.\n<\/p>\n \nFor the six months ended July 31, 2021, adjusted earnings from operations was $114.5 million, compared to adjusted loss from operations of $109.5 million for the six months ended August 1, 2020. Adjusted operating margin improved 26.6% to 10.0% for the six months ended July 31, 2021, from negative 16.6% in the same prior-year period, driven primarily by overall leveraging of expenses.\n<\/p>\n Outlook<\/span><\/b><\/p>\n \nGiven the current circumstances regarding the coronavirus (or \u201cCOVID-19\u201d) crisis and its uncertain impact on our operations, we are not providing detailed guidance for the third quarter or the full fiscal year ending January 29, 2022. We expect revenues in the third quarter of fiscal 2022 to be slightly negative to flat versus the third quarter of fiscal 2020 as pandemic-related traffic declines are almost offset by continued momentum in our global e-commerce business and the favorable shift of European wholesale shipments from the second quarter into the third quarter.\n<\/p>\n \nFor the full fiscal year 2022, assuming no additional COVID-related shutdowns past the second quarter, we expect revenues to be down mid-single digits versus fiscal 2020 and operating margin to reach approximately 10.0%. The expectations for the full year also assume a return to a normal cadence of product development for our European wholesale business. These comparisons are versus the pre-pandemic periods from two fiscal years prior in order to provide a more normalized comparison.\n<\/p>\n COVID-19 Second Quarter Business Update<\/span><\/b><\/p>\n \nThe COVID-19 pandemic is continuing to impact the Company\u2019s businesses. During the second quarter of fiscal 2022, the Company experienced lower net revenue compared to the second quarter of fiscal 2020 as it remained challenged by lower demand, capacity restrictions and temporary store closures. In light of the current environment, we continue to strategically manage expenses in order to protect profitability.\n<\/p>\n \nDuring the second quarter of fiscal 2022, the Company gradually reopened its stores that were closed at the end of the first quarter of fiscal 2022 due to COVID-19 restrictions. The overall impact resulted in stores being closed for approximately 5% of the total days during the second quarter of fiscal 2022, primarily in Europe and Canada. As of July 31, 2021, 100% of our stores were open.\n<\/p>\n Dividend<\/span><\/b><\/p>\n \nThe Company\u2019s Board of Directors has approved a quarterly cash dividend of $0.1125 per share on the Company\u2019s common stock. The dividend will be payable on September 24, 2021 to shareholders of record as of the close of business on September 8, 2021.\n<\/p>\n Share Repurchase<\/span><\/b><\/p>\n \nThe Company announced today that its Board of Directors has authorized a program to repurchase, from time-to-time and as market and business conditions warrant, up to $200 million of its common stock. The newly authorized $200 million program includes $48 million remaining under the Company’s previously authorized $500 million repurchase program. Repurchases may be made on the open market or in privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means. There is no minimum or maximum number of shares to be repurchased under the program and the program may be discontinued at any time, without prior notice.\n<\/p>\n Presentation of Non-GAAP Information<\/span><\/b><\/p>\n \nThe financial information presented in this release includes non-GAAP financial measures, such as adjusted results, constant currency financial information, free cash flows and return on invested capital. For the three months and six months ended July 31, 2021, August 1, 2020 and August 3, 2019, the adjusted results exclude the impact of certain professional service and legal fees and related (credits) costs, certain separation charges, asset impairment charges, net gains on lease modifications, non-cash amortization of debt discount on the Company\u2019s convertible senior notes, the related income tax effects of the foregoing items, as well as the impact from changes in the income tax law on deferred income taxes in certain tax jurisdictions, net income tax settlements and adjustments to specific uncertain income tax positions, as well as certain discrete income tax adjustments, where applicable. These non-GAAP measures are provided in addition to, and not as alternatives for, the Company\u2019s reported GAAP results.\n<\/p>\n \nThe Company has excluded these items from its adjusted financial measures primarily because it believes these items are not indicative of the underlying performance of its business and the adjusted financial information provided is useful for investors to evaluate the comparability of the Company\u2019s operating results and its future outlook (when reviewed in conjunction with the Company\u2019s GAAP financial statements). A reconciliation of reported GAAP results to comparable non-GAAP results is provided.\n<\/p>\n \nThis release also includes certain constant currency financial information. Foreign currency exchange rate fluctuations affect the amount reported from translating the Company\u2019s foreign revenue, expenses and balance sheet amounts into U.S. dollars. These rate fluctuations can have a significant effect on reported operating results under GAAP. The Company provides constant currency information to enhance the visibility of underlying business trends, excluding the effects of changes in foreign currency translation rates. To calculate net revenue and earnings (loss) from operations on a constant currency basis, actual or forecasted results for the current-year period are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year. The constant currency calculations do not adjust for the impact of revaluing specific transactions denominated in a currency different from the functional currency of that entity when exchange rates fluctuate. However, in calculating the estimated impact of currency on our earnings (loss) per share for our actual or forecasted results, the Company estimates gross margin (including the impact of merchandise-related hedges) and expenses using the appropriate prior-year rates, translates the estimated foreign earnings at the comparable prior-year rates, and excludes the year-over-year earnings impact of gains or losses arising from balance sheet remeasurement and foreign currency contracts not designated as merchandise hedges. The constant currency information presented may not be comparable to similarly titled measures reported by other companies.\n<\/p>\n \nThe Company also includes information regarding its free cash flows in this release. The Company calculates free cash flows as cash flows from operating activities less (i) purchases of property and equipment and (ii) payments for property and equipment under finance leases. Free cash flows are not intended to be an alternative to cash flows from operating activities as a measure of liquidity, but rather to provide additional visibility to investors regarding how much cash is generated for discretionary and non-discretionary items after deducting purchases of property and equipment and payments for property and equipment under finance leases. Free cash flow information presented may not be comparable to similarly titled measures reported by other companies. A reconciliation of reported GAAP cash flows from operating activities to the comparable non-GAAP free cash flow measure is provided.\n<\/p>\n \nThe Company also includes information regarding its return on invested capital (or \u201cROIC\u201d) in this release. The Company defines ROIC as adjusted net operating profit after income taxes divided by two-year average invested capital. The Company believes ROIC is a useful financial measure for investors in evaluating how efficiently the Company deploys its capital. The Company\u2019s method of calculating ROIC may differ from other companies\u2019 methods and, therefore, might not be comparable.\n<\/p>\n Investor Conference Call<\/span><\/b><\/p>\n The Company will hold a conference call at 4:45 pm (ET) on August 25, 2021 to discuss the news announced in this press release. A live webcast of the conference call will be accessible at www.guess.com<\/a> via the \u201cInvestor Relations\u201d link. The webcast will be archived on the website for 30 days.<\/i><\/p>\n
\nGuess?, Inc. (NYSE: GES) today reported financial results for its second quarter ended July 31, 2021.\n<\/p>\n