Guess Inc. has reported a decline in revenue and earnings for the third quarter, which the company attributes to lower sales in the U.S. and Europe. However, its operations in Asia and licensing segment helped offset some of the losses. The Los Angeles-based fashion label revealed that its total net revenue for the quarter ending October 29 decreased by 2% to $633.4 million. However, in constant currency, net revenue actually increased by 10%.

In terms of regional performance, Guess witnessed a decline of 2% in Americas retail revenues in U.S. dollars and 1% in constant currency. Retail comp sales, which include e-commerce, also decreased by 1% in U.S. dollars. Americas wholesale revenues fared even worse, plunging by 10% in U.S. dollars.

Internationally, Europe revenues decreased by 2% in U.S. dollars, but saw an increase of 17% in constant currency. Retail comp sales in Europe, including e-commerce, declined by 8% in U.S. dollars, but increased by 9% in constant currency. On the other hand, Asia revenues showed growth, increasing by 10% in U.S. dollars and an impressive 28% in constant currency. Retail comp sales in Asia, including e-commerce, decreased by 2% in U.S. dollars, but still managed to increase by 13% in constant currency. Additionally, licensing revenues grew by 4% for the company.

Guess attributes the decline in net earnings to unfavorable currency exchange rates and lower full price selling. As a result, net earnings fell by 27% to $21.8 million from the same quarter in the previous year. Despite the challenging retail environment, the company expressed satisfaction with its financial results for the third quarter. Carlos Alberini, the CEO of Guess, emphasized the strength of their business in Europe and their ability to manage the business well.

Looking to the future, Guess anticipates a decrease in revenues of approximately 3.5% in U.S. dollars (but growth of 3.5% in constant currency) for the fourth quarter of fiscal 2023. For the full fiscal year, the company expects revenues to increase by around 2% in U.S. dollars (or 10.5% in constant currency). Despite the challenges faced by the fashion industry, Guess remains optimistic about its future performance.

For more information on Guess Inc.’s third-quarter financial report, click here.
To learn more about the fashion industry and its challenges, click here.