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GES NYSE· Guess Inc
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GES NYSE· Guess Inc
Earnings report Q4 2023

GES Reports Modest Revenue Growth in Latest Quarter

Segments of Revenue

GES reported a total net revenue of $651.2 million for the quarter ended October 28, 2023, representing a 2.8% increase compared to the same prior-year quarter. This growth was driven by a 1.2% increase in net revenue in constant currency. The company's net revenue is derived from the sale of GUESS?, G by GUESS (GbG), GUESS Kids, MARCIANO apparel, certain accessories, and products from its licensees.

Strengths

GES demonstrated resilience in its revenue performance, achieving modest growth in the latest quarter. The company's gross margin improved by 220 basis points to 44.7% compared to the same prior-year quarter, indicating effective cost management and pricing strategies. This improvement in gross margin contributed to the overall revenue growth. Additionally, GES highlighted that the increase in net revenue was driven by its worldwide network of directly-operated and licensed retail stores, wholesale customers, and distributors.

Challenges

Despite the overall revenue growth, GES faced challenges in managing its selling, general, and administrative (SG&A) expenses. The SG&A rate increased by 240 basis points to 36.0% for the quarter ended October 28, 2023, compared to the same prior-year quarter. SG&A expenses also increased by 10.0% to $234.1 million. This increase in SG&A expenses could potentially impact the company's profitability and requires careful cost management in the future.

Noteworthy

During the quarter ended October 28, 2023, GES recognized $1.7 million of asset impairment charges, slightly lower than the $1.8 million recognized in the same prior-year quarter. This indicates ongoing efforts by the company to assess and manage its assets effectively. The company's management also provided adjusted net earnings and adjusted diluted EPS figures, excluding certain items, to provide a clearer picture of its financial performance.

Summary

GES reported modest revenue growth in the latest quarter, with a 2.8% increase in total net revenue. The company's gross margin improved, indicating effective cost management and pricing strategies. However, GES faced challenges in managing its SG&A expenses, which increased by 240 basis points. The company recognized asset impairment charges, albeit at a slightly lower level compared to the same prior-year quarter. Overall, GES demonstrated resilience in its revenue performance, driven by its worldwide network of retail stores, wholesale customers, and distributors.

Source documents

Form 10-Q  filed on Dec 01, 2023
88 pages scanned

Reference data

Company financials Q4 revenue 651M
Analyst estimates Q4 EPS missed by -19.92%
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