Guess Inc. has recently reported financial results for its first quarter ended April 30, 2022.
Carlos Alberini, Chief Executive Officer, commented, “We are very pleased with our first quarter results which exceeded our expectations for top line and operating performance. Our Company’s revenues finished up 14% in U.S. dollars and 21% in constant currency with Europe, Americas Wholesale and Licensing performing better than expected. Overall, we delivered strong gross margin performance and leveraged expenses effectively, contributing to an expansion in operating margin and a significant increase in earnings from operations compared to the prior year. During the quarter, we continued to prioritize returning value to our shareholders and purchased over 500,000 shares of our stock in open market transactions and entered into a $175 million accelerated share repurchase program which is presently being executed.”
Paul Marciano, Co-Founder and Chief Creative Officer, added, “We have continued to make great progress in enhancing our product offering and I strongly believe that our current collections are the best they have been across all product categories. As always, we stay true to our brand and values and focus on what we can control. During the last few years, we have transformed our business and elevated our brands very successfully and our customers are responding well to our offerings. Today, our Company is very well positioned to compete in the current marketplace and gain market share among our different product categories and territories. We are very proud of our teams and highly confident in our future.”
First Quarter Fiscal 2023 Results
For the first quarter of fiscal 2023, the Company recorded GAAP net earnings of $8.0 million, a 33.6% decrease from $12.0 million for the first quarter of fiscal 2022. GAAP diluted EPS decreased 33.3% to $0.12 for the first quarter of fiscal 2023, compared to $0.18 for the same prior-year quarter. The Company estimates a net positive impact from its adoption of new accounting guidance related to the Company’s convertible notes and share buybacks of $0.04 and a negative impact from currency of $0.14 on GAAP diluted EPS in the first quarter of fiscal 2023 when compared to the same prior-year quarter.
For the first quarter of fiscal 2023, the Company’s adjusted net earnings were $15.2 million, a 9.8% increase from $13.9 million for the first quarter of fiscal 2022. Adjusted diluted EPS increased 14.3% to $0.24, compared to $0.21 for the same prior-year quarter. The Company estimates a net positive impact from its share buybacks of $0.01 and a negative impact from currency of $0.14 on adjusted diluted EPS in the first quarter of fiscal 2023 when compared to the same prior-year quarter.
- Net Revenue. Total net revenue for the first quarter of fiscal 2023 increased 14% to $593.5 million from $520.0 million in the same prior-year quarter. In constant currency, net revenue increased by 21%.
- For the first quarter of fiscal 2023, adjusted earnings from operations increased 61% to $41.7 million, from $26.0 million in the same prior-year quarter. Adjusted operating margin increased 2.0% to 7.0%, from 5.0% for the same prior-year quarter, driven primarily by overall leveraging of expenses, partially offset by higher store labor costs in Americas Retail and unfavorable currency impact.
- Other expense, net. Other expenses, net for the first quarter of fiscal 2023 was $16.5 million compared to $2.7 million for the same prior-year quarter. The change was primarily due to higher net unrealized and realized losses from foreign currency exposures and higher net unrealized losses on our SERP-related assets compared to the same prior-year quarter.