Guess(US:GES)2024-08-29 10:21Financial Data and Key Metrics Changes - Revenues grew 10% in U.S. dollars and 13% in constant currency, reaching $733 million [4][25] - Adjusted operating profit was $38 million with an adjusted operating margin of 5.2%, slightly below expectations [7][30] - Adjusted earnings per share decreased to $0.42 from $0.72 in the previous year [30] Business Line Data and Key Metrics Changes - European wholesale business showed strong performance, contributing to revenue growth, while Asia experienced declines [4][26] - Americas retail business faced challenges with a 10% constant currency comp decline, while wholesale revenues increased significantly due to the addition of rag & bone [28][29] - Licensing segment revenues increased by 4%, maintaining a high operating margin of 93.3% [29] Market Data and Key Metrics Changes - European retail comp sales increased by 1% in U.S. dollars and 4% in constant currency, despite lower traffic [26] - Asia revenues declined by 8% in U.S. dollars and 4% in constant currency, with significant comp declines in Korea and China [29][62] - The Americas wholesale segment saw a 93% increase in revenues, driven by rag & bone [28] Company Strategy and Development Direction - The company is focused on transforming into a platform that can support multiple brands, with rag & bone being a key addition [9][66] - Investments in marketing and brand awareness have been significantly increased to support growth initiatives [7][16] - The company aims to optimize operations and enhance organizational structure to better support global business [17][19] Management's Comments on Operating Environment and Future Outlook - Management noted a softer consumer environment and revised revenue growth expectations to between 9.5% and 11% for the year [8][34] - The company anticipates challenges from increased freight costs and is adjusting spending plans accordingly [39][40] - Management expressed confidence in the long-term growth potential of rag & bone and the overall brand portfolio [66] Other Important Information - The company has secured additional capital through refinancing and expanding credit facilities to support growth initiatives [21][33] - Inventory levels increased by 9% year-over-year, primarily due to the acquisition of rag & bone [31] Q&A Session Summary Question: Trends for Guess? and rag & bone brands - Management highlighted that rag & bone targets a more affluent consumer and has different distribution strategies compared to Guess? [46][47] Question: Breakdown of trends by geography - Management noted that the Americas retail business is facing challenges with traffic, while Europe continues to show positive same-store sales growth [56][59] Question: Long-term goals for wholesale, retail, or margin - Management emphasized that this year is a transformation year with significant investments aimed at optimizing the business and expanding the rag & bone brand [66]