Guess?, Inc. reported negative results for the third quarter 2016, resulting from negative impact of currency. Results did, however, beat analyst expectations.
Guess recorded net earnings of $12.4 million, a 40.1% decrease compared to 20.8 million for the third quarter of fiscal 2015. Diluted earnings per share decreased 37.5% to $0.15, compared to $0.24 for the prior-year quarter. The negative impact of currency on earnings per share in the third quarter of fiscal 2016 was approximately 13 cents.
Analysts polled by Thomson Reuters estimated earnings of $0.11 per share for the quarter.
Americas retail revenues decreased 7% in U.S. dollars and 3% in constant currency, while Americas wholesale revenue decreased 12% or 3% in constant currency. Europe revenues decreased 15% in U.S. dollars and 2% in constant currency, and Asia revenues decreased 17% in U.S. dollars and 9% in constant currency.
RTTNews reported that Guess has struggled with the strong dollar for the past several quarters, as the brand generates a large portion of its sales overseas. In addition, RTTNews attributed the negative results to intense competition in key markets, weak traffic and soft consumer sentiment
Victor Herrero, Guess CEO, commented, “I am pleased to report that third quarter results were better than our expectations. Our European retail business was especially strong with a double digit comp sales increase for the quarter for the first time in five years.”
Herrero went on to say that the company made progress on all three initiatives he outlined in his last earnings call. These initiatives include improving the quality of the sales and merchandising organization, building Guess’ Asia business through critical hires and deploying incremental capital, and reinforcing a culture of purpose and accountability.