Guess?, Inc., a fashion retailer based in Los Angeles, has reported a significant decline in net revenue for the second quarter of this year due to the impact of the Covid-19 pandemic. Net revenues dropped by 41.7% to $398.5 million, compared to $683.2 million in the same period last year. When adjusted for constant currencies, the decrease in revenues was 41.2%.

The decline in revenues was felt across all of Guess’ distribution channels. In the Americas, retail revenues fell by 44.7%, while wholesale revenues decreased by 51.6%. Europe and Asia also saw decreases of 39.5% and 39.7%, respectively. Licensing revenues also experienced a decline of 34.5%.

Guess stores, which had to temporarily close due to the health crisis, began reopening in the second quarter. On average, the physical locations were closed for about 30% of the quarter. Currently, 95% of the stores have reopened. Guess operates 1,084 directly operated stores worldwide, with an additional 538 locations operated by partners and distributors.

The company reported a quarterly net loss of $20.4 million, or $0.31 per diluted share, compared to earnings of $25.3 million, or $0.35 per diluted share, in the same period last year. Despite the decrease in revenues, Guess CEO Carlos Alberini highlighted the success of the company’s efforts to minimize losses through cost reduction and inventory management. Alberini stated, “I believe that our efforts paid off, as we minimized our losses in spite of a 42% decrease in our revenues.”

For the first half of the fiscal year, Guess recorded a net revenue of $658.8 million, a decrease of 46.0% compared to the $1.22 billion reported in the same period last year. In the Americas, retail revenues fell by 50.8%, while wholesale revenues decreased by 47.6%. Europe saw a decline of 43.3% in revenues, and Asia experienced a decrease of 46.2%. Licensing revenues declined by 32.9%. The net loss for the first half was $178.0 million, or $2.72 per diluted share, compared to net earnings of $3.9 million, or $0.05 per diluted share, in the previous year’s period.

Given the ongoing uncertainty surrounding the Covid-19 pandemic, Guess has not provided a financial outlook for the third quarter or full fiscal year 2021. However, Alberini remains optimistic about the future and believes that Guess is well-positioned for the second half of the year. He expressed excitement about the company’s product offering and marketing plan for the upcoming holiday season.

Useful Links:
Guess, Inc. Official Website
Wall Street Journal Article on Guess’ Revenue Decline