<\/p>\n
Guess?, Inc. Reports Fiscal Year 2023 Third Quarter Results<\/span><\/b><\/p>\n Q3 Fiscal 2023 Revenues Reached $633 Million, Down 2% in U.S. Dollars and Up 10% in Constant Currency Compared to Q3 Fiscal 2022<\/span><\/b><\/p>\n Delivered Q3 Operating Margin of 8.6%; Adjusted Operating Margin of 9.1%<\/span><\/b><\/p>\n Q3 EPS of $0.34 and Adjusted EPS of $0.44<\/span><\/b><\/p>\n Expects Fiscal 2023 Revenue Growth of About 2.0% in U.S. Dollars, 10.5% in Constant Currency, and GAAP and Adjusted Operating Margins of 9.3% and 9.7%, Respectively<\/span><\/b><\/p>\n Expects Fiscal 2023 GAAP EPS of $1.82 and Adjusted EPS of $2.35<\/span><\/b><\/p>\n LOS ANGELES–(BUSINESS WIRE<\/a>)– \nCarlos Alberini, Chief Executive Officer, commented, \u201cWe are pleased with our third quarter financial results, which exceeded our revenue and operating profit expectations in a challenging retail environment. Our revenues decreased by almost 2% in U.S. dollars but grew 10% in constant currency, driven primarily by the strength of our business in Europe. For the period, we managed the business well and delivered an 8.6% operating margin and $55 million in operating profit. Lower performance-based compensation helped us partially offset the gross margin pressure we experienced as a result of the adverse currency impact associated with the strong U.S. dollar and lower full price selling.\u201d\n<\/p>\n \nPaul Marciano, Co-Founder and Chief Creative Officer, commented, \u201cOur focus remains on delivering great product to support our customers\u2019 lifestyles with one global product line for our multiple categories of apparel and accessories. Through our focus on brand elevation, we have improved the quality and styling of our products. Our Guess and Marciano collections are both resonating well across our different customer groups. I am very pleased with how our teams continue to work well together to leverage our strong brand momentum and gain market share.\u201d\n<\/p>\n \nMr. Alberini concluded, \u201cWe are well positioned for our holiday period. We have a solid business plan and inventory levels are well aligned with our business trends. Our updated outlook for the fiscal year reflects these trends and the impact of further currency headwinds. We believe that the combination of our diversified business model, our global brands and our strong capital structure provides us with a significant competitive advantage in the current marketplace and remain confident in our long-term growth opportunities.\u201d\n<\/p>\n Non-GAAP Inf<\/span>ormation<\/span><\/b><\/p>\n \nThis press release contains non-GAAP financial measures, including certain adjusted results of operations and outlook measures, constant currency information and free cash flow measures. See the heading \u201cPresentation of Non-GAAP Information\u201d for further information and the accompanying tables for a reconciliation to the comparable GAAP financial measure.\n<\/p>\n Third Quarter Fiscal 2023 Results<\/span><\/b><\/p>\n \nFor the third quarter of fiscal 2023, the Company recorded GAAP net earnings of $21.8 million, a 26.9% decrease from $29.9 million for the same prior-year quarter. GAAP diluted net earnings per share (\u201cEPS\u201d) decreased 24.4% to $0.34 for the third quarter of fiscal 2023, compared to $0.45 for the same prior-year quarter. The Company estimates a net positive impact from its adoption of the accounting guidance related to the Company\u2019s convertible notes and share buybacks of $0.07 and a negative impact from currency of $0.22 on GAAP diluted EPS in the third quarter of fiscal 2023 when compared to the same prior-year quarter.\n<\/p>\n \nFor the third quarter of fiscal 2023, the Company\u2019s adjusted net earnings were $24.7 million, a 40.4% decrease from $41.6 million for the same prior-year quarter. Adjusted diluted EPS decreased 29.0% to $0.44, compared to $0.62 for the same prior-year quarter. The Company estimates a net positive impact from its share buybacks of $0.07 and a negative impact from currency of $0.28 on adjusted diluted EPS in the third quarter of fiscal 2023 when compared to the same prior-year quarter.\n<\/p>\n Net Revenue. <\/i><\/b>Total net revenue for the third quarter of fiscal 2023 decreased 2% to $633.4 million from $643.1 million in the same prior-year quarter. In constant currency, net revenue increased by 10%.\n<\/p>\n Earnings from Operations.<\/i><\/b>GAAP earnings from operations for the third quarter of fiscal 2023 decreased 17% to $54.8 million (including $1.8 million in non-cash impairment charges taken on certain long-lived store related assets, $0.1 million net gains on lease modifications and an $11.9 million unfavorable currency translation impact), from $65.7 million (including $1.2 million in non-cash impairment charges taken on certain long-lived store related assets and $3.0 million net losses on lease modifications) in the same prior-year quarter. GAAP operating margin in the third quarter of fiscal 2023 decreased 1.6% to 8.6%, from 10.2% for the same prior-year quarter, driven primarily by the unfavorable impact of currency, higher costs and markdowns, partially offset by leveraging of expenses. The negative impact of currency on operating margin for the quarter was approximately 190 basis points.\n<\/p>\n \nFor the third quarter of fiscal 2023, adjusted earnings from operations decreased 18% to $58.0 million, from $70.4 million in the same prior-year quarter. Adjusted operating margin decreased 1.8% to 9.1%, from 10.9% for the same prior-year quarter, driven primarily by the unfavorable impact of currency, higher costs and markdowns, partially offset by leveraging of expenses.\n<\/p>\n Other expense, net. <\/i><\/b>Other expense, net for the third quarter of fiscal 2023 was $15.2 million compared to $7.8 million for the same prior-year quarter. The change was primarily due to net unrealized losses on the Company\u2019s SERP-related assets compared to net unrealized gains in the same prior-year quarter and, to a lesser extent, higher unrealized losses from foreign currency exposures.\n<\/p>\n Nine-Month Period Results<\/span><\/b><\/p>\n \nFor the nine months ended October 29, 2022, the Company recorded GAAP net earnings of $53.8 million, a 47.8% decrease from $102.9 million for the same prior-year period. GAAP diluted EPS decreased 48.4% to $0.80 for the nine months ended October 29, 2022, compared to $1.55 during the same prior-year period. The Company estimates a net positive impact from its adoption of the accounting guidance related to the Company\u2019s convertible notes and share buybacks of $0.16 and a negative impact from currency of $0.53 on GAAP diluted EPS for the nine months ended October 29, 2022 when compared to same prior-year period.\n<\/p>\n \nFor the nine months ended October 29, 2022, the Company recorded adjusted net earnings of $62.9 million, a 47.4% decrease from $119.5 million for the same prior-year period. Adjusted diluted EPS decreased 40.8% to $1.06, compared to $1.79 for the same prior-year period. The Company estimates its share buybacks had a net positive impact of $0.12, and currency had a negative impact of $0.61 on adjusted diluted EPS during the nine months ended October 29, 2022 when compared to same prior-year period.\n<\/p>\n Net Revenue. <\/i><\/b>Total net revenue for the nine months ended October 29, 2022 increased 4% to $1.87 billion, from $1.79 billion in the same prior-year period. In constant currency, net revenue increased by 14%.\n<\/p>\n Earnings from Operations.<\/i><\/b>GAAP earnings from operations for the nine months ended October 29, 2022 decreased 19% to $144.6 million (including $5.3 million in non-cash impairment charges taken on certain long-lived store related assets, $1.7 million net gains on lease modifications and a $25.6 million unfavorable currency translation impact), from $179.6 million (including $3.1 million in non-cash impairment charges taken on certain long-lived store related assets and $0.4 million net losses on lease modifications) in the same prior-year period. GAAP operating margin in the nine months ended October 29, 2022 decreased 2.3% to 7.7%, from 10.0% in the same prior-year period, driven primarily by the unfavorable currency impact, higher markdowns, higher costs and lower rent relief, partially offset by overall leveraging of expenses. The negative impact of currency on operating margin for the nine months ended October 29, 2022 was approximately 140 basis points.\n<\/p>\n \nFor the nine months ended October 29, 2022, adjusted earnings from operations decreased 16% to $155.4 million, from $184.9 million in the same prior-year period. Adjusted operating margin decreased 2.0% to 8.3%, from 10.3% for the same prior-year period, driven primarily by the unfavorable currency impact, higher markdowns, higher costs and lower rent relief, partially offset by overall leveraging of expenses.\n<\/p>\n Other expense, net. <\/i><\/b>Other expense, net for the nine months ended October 29, 2022 was $40.7 million compared to $11.5 million in the same prior-year period. The change was primarily due to higher net unrealized and realized losses from foreign currency exposures and, to a lesser extent, net unrealized losses on our SERP-related assets compared to net unrealized gains in the same prior-year period.\n<\/p>\n Outlook<\/span><\/b><\/p>\n \nFor the fourth quarter of fiscal 2023, we expect revenues to be down around 3.5% in U.S. dollars (up 3.5% in constant currency) versus the fourth quarter of fiscal 2022. For the full fiscal 2023, we expect revenues to be up around 2.0% in U.S. dollars (10.5% in constant currency) versus fiscal 2022.\n<\/p>\n \nA reconciliation of the Company\u2019s outlook for GAAP operating margin to adjusted operating margin and GAAP diluted EPS to adjusted diluted EPS for the fourth quarter and fiscal 2023 is as follows:\n<\/p>\n Reconciliation of GAAP Outlook to Adjusted Outlook<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n Fourth Quarter of Fiscal 2023<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \nGAAP operating margin\n<\/p>\n<\/td>\n \n13.2%\n<\/p>\n<\/td>\n \n9.3%\n<\/p>\n<\/td>\n<\/tr>\n \nCertain professional service and legal fees and related (credits) costs1<\/sup><\/p>\n<\/td>\n \n\u2014%\n<\/p>\n<\/td>\n \n0.3%\n<\/p>\n<\/td>\n<\/tr>\n \nAsset impairment charges1<\/sup><\/p>\n<\/td>\n \n\u2014%\n<\/p>\n<\/td>\n \n0.2%\n<\/p>\n<\/td>\n<\/tr>\n \nNet gains on lease modifications1<\/sup><\/p>\n<\/td>\n \n\u2014%\n<\/p>\n<\/td>\n \n(0.1%)\n<\/p>\n<\/td>\n<\/tr>\n \nAdjusted operating margin\n<\/p>\n<\/td>\n \n13.2%\n<\/p>\n<\/td>\n \n9.7%\n<\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \nGAAP diluted EPS\n<\/p>\n<\/td>\n \n$1.09\n<\/p>\n<\/td>\n \n$1.82\n<\/p>\n<\/td>\n<\/tr>\n \nCertain professional service and legal fees and related (credits) costs1<\/sup><\/p>\n<\/td>\n \n\u2014\n<\/p>\n<\/td>\n \n0.08\n<\/p>\n<\/td>\n<\/tr>\n \nAsset impairment charges1<\/sup><\/p>\n<\/td>\n \n\u2014\n<\/p>\n<\/td>\n \n0.06\n<\/p>\n<\/td>\n<\/tr>\n \nNet gains on lease modifications1<\/sup><\/p>\n<\/td>\n \n\u2014\n<\/p>\n<\/td>\n \n(0.02)\n<\/p>\n<\/td>\n<\/tr>\n \nDiscrete income tax adjustments1<\/sup><\/p>\n<\/td>\n \n\u2014\n<\/p>\n<\/td>\n \n0.01\n<\/p>\n<\/td>\n<\/tr>\n \nImpact of convertible share dilution2<\/sup><\/p>\n<\/td>\n \n0.23\n<\/p>\n<\/td>\n \n0.40\n<\/p>\n<\/td>\n<\/tr>\n \nAdjusted diluted EPS\n<\/p>\n<\/td>\n \n$1.32\n<\/p>\n<\/td>\n \n$2.35\n<\/p>\n<\/td>\n<\/tr>\n \n____________________\n<\/p>\n<\/td>\n<\/tr>\n \nSee end of release for footnotes.\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n Dividend<\/span><\/b><\/p>\n \nThe Company\u2019s Board of Directors approved a quarterly cash dividend of $0.225 per share on the Company\u2019s common stock. The dividend will be payable on December 23, 2022 to shareholders of record as of the close of business on December 7, 2022.\n<\/p>\n Share Repurchases<\/span><\/b><\/p>\n \nIn March 2022, the Company entered into an accelerated share repurchase agreement (\u201cASR\u201d), pursuant to which it initially received approximately 3.3 million shares of common stock (representing approximately $70.0 million, or 40%) of the $175.0 million notional amount of the ASR. The Company received a final delivery of an additional 5.2 million shares under the ASR on June 24, 2022. During the nine months ended October 29, 2022, the Company also repurchased approximately 0.5 million shares of its common stock in open market transactions totaling $11.7 million. Combined, these transactions resulted in the repurchase of approximately 9.0 million shares for $186.7 million during the nine months ended October 29, 2022, all of which occurred during the six months ended July 30, 2022.\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 and outlook, constant currency financial information and free cash flows. The adjusted measures exclude the impact of certain professional service and legal fees and related (credits) costs, asset impairment charges, net (gains) losses 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, 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 related primarily to an intra-entity transfer of intellectual property rights from certain U.S. entities to a wholly-owned Swiss subsidiary, in each case where applicable. These non-GAAP measures are provided in addition to, and not as alternatives for, the Company\u2019s reported GAAP results and outlook.\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 in the accompanying tables.\n<\/p>\n \nThis release 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 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 in the accompanying tables.\n<\/p>\n Investor Conference Call<\/span><\/b><\/p>\n The Company will hold a conference call at 4:45 pm (ET) on November 22, 2022 to discuss the news announced in this press release. A live webcast of the conference call will be accessible at www.guess.com<\/a><\/span> 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 third quarter ended October 29, 2022.\n<\/p>\n\n
\n
\n
\n
\n
\n \n \n \n \n \n \n \n
\n
<\/b>Fiscal 2023<\/b><\/p>\n<\/td>\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n